European Stocks Edge Lower Amid Hormuz Tensions
European equity markets moved slightly lower on Thursday, as investors remained cautious over ongoing tensions in the Strait of Hormuz despite an extended ceasefire between the U.S. and Iran.
By early trading, the pan-European Stoxx 600 fell 0.4%, while Germany’s DAX declined 0.5% and the U.K.’s FTSE 100 dropped 0.6%. In contrast, France’s CAC 40 outperformed, rising 0.3%.
L’Oréal Boosts French Market
The French market was supported by strong performance from L’Oréal, whose shares surged more than 8% after reporting its fastest quarterly growth in two years. The results helped offset broader concerns about how the Iran conflict could impact consumer spending.
Uncertainty Over US-Iran Peace Talks
Investor sentiment remained fragile as markets looked for signs of renewed negotiations between Washington and Tehran. U.S. President Donald Trump suggested that fresh talks could begin as soon as Friday, following the extension of a ceasefire brokered with mediation support from Pakistan.
However, uncertainty persists. Iran escalated tensions shortly after the announcement by attacking three vessels and seizing two near the Strait of Hormuz, responding to the ongoing U.S. naval blockade.
Oil Prices Remain Elevated
Concerns over potential supply disruptions through the Strait of Hormuz—which handles roughly 20% of global oil shipments—pushed crude prices back above $100 per barrel.
Although prices have eased from initial spikes earlier in the conflict, they remain significantly higher than pre-war levels, continuing to pressure global markets.
Eurozone Data in Focus
Investors are also awaiting business activity data from the eurozone, which may provide insights into how companies are managing the economic impact of rising energy costs.
Earnings Season Takes Center Stage
Despite geopolitical tensions, some analysts suggest that investors are increasingly shifting focus toward corporate earnings and growing investment in artificial intelligence infrastructure.
Mixed Corporate Results Across Europe
Essity reported better-than-expected core earnings, supported by higher volumes, although the company signaled potential price increases to offset rising energy costs.
In contrast, Sainsbury’s warned that the ongoing conflict could weigh on consumer spending, sending its shares down more than 5%.
Meanwhile, aerospace group Safran posted stronger-than-expected revenue and reaffirmed its 2026 outlook, supporting its stock.
Pharmaceutical giant Sanofi also exceeded expectations in the first quarter, driven by strong demand for its asthma and eczema treatment Dupixent, pushing shares higher by over 2%.
