April 2 (Reuters) – Europe’s main stock index fell more than 1% on Thursday as hopes of a quick end to the Middle East conflict faded after U.S. President Donald Trump vowed more strikes on Iran.
The pan-European STOXX 600 index dropped 1.2% to 589.99 points by 0725 GMT. The index is on track for a weekly rise.
Technology stocks slid nearly 3% and led sectors lower, while miners fell 2.7%, tracking lower precious metal prices. [GOL/]
Market sentiment weakened after Trump said “we’re going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages where they belong.”
Brent crude whizzed past $100 a barrel, up nearly 7% with energy stocks up 1.2%, making them the only major sector trading higher.
Rising oil prices pressured airline stocks such as Air France and Lufthansa, which fell more than 3.7% each.
The STOXX 600 jumped more than 2% on Wednesday after Trump said that Washington would wind up its hostilities with Iran imminently, reflecting the volatility investors have had to navigate for more than a month.
A delay in reopening the Strait of Hormuz, a strategic waterway for major European imports, will continue to pressure equities and reinforce heightened inflation and growth fears.
Interest rate futures are pricing in at least three interest rate hikes of 25 basis points each by the end of this year, according to LSEG-compiled data. Markets had been pricing in no change to monetary policy by the European Central Bank before the war.
Markets will be closed for Good Friday and Easter Monday.
(Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Nivedita Bhattacharjee and Mrigank Dhaniwala)
Comments