European Stock Markets Decline as US-Iran Tensions Escalate
European stock markets moved lower on Thursday as escalating tensions in the Middle East weakened investor confidence and reduced hopes for a near-term agreement to reopen the Strait of Hormuz.
Growing geopolitical uncertainty also increased concerns about the outlook for the global economy and rising energy costs.
The pan-European STOXX 600 index fell 0.4% to 625.83 by 0806 GMT, while all major regional stock exchanges across Europe also traded in negative territory.
Oil Prices Surge Above $97 Per Barrel
Crude oil prices climbed more than 2.5%, with Brent crude trading above $97 per barrel as hostilities between the United States and Iran intensified.
Kuwait also reported that its air defense systems were intercepting hostile missile and drone attacks, similar to those seen during the height of the conflict earlier this year.
Higher oil prices remain a major concern for Europe, which relies heavily on imported energy supplies.
Airline Stocks Weaken on Rising Energy Costs
European airline shares came under pressure as investors reacted to rising fuel prices.
Shares of Air France-KLM and Lufthansa both declined around 1% during Thursday’s trading session.
Most sectors across Europe traded lower, although gains in technology stocks helped limit broader market losses.
Technology Shares Provide Some Support
French semiconductor materials supplier Soitec surged 16% after reporting annual sales that exceeded market expectations.
The strong earnings report also lifted sentiment across the semiconductor sector.
Chipmakers including Infineon and STMicroelectronics gained more than 2% each.
BT Shares Fall After UK Government Report
Elsewhere in the market, shares of BT Group fell 2.5% in volatile trading after reports suggested that the British government could oppose any attempt by Indian billionaire Sunil Bharti Mittal to increase his stake in the telecommunications company.
According to the report, UK authorities are concerned about maintaining sovereign control over what they described as “critical national infrastructure.”
