European Stocks Slide

European equities closed sharply down lower on Thursday amid another surge in key energy prices and hawkish signals from major central banks in the continent. The Eurozone's STOXX 50 dropped 2.1% to 5,616 and the pan-European fell 2.4% to 584 mark, their lowest this year. European natural gas and power prices soared after Iran struck Qatari and Saudi energy infrastructure, prompting the US to threaten Iranian gas fields. The surge in energy costs this month drove the ECB to hold rates unchanged but upwardly revise inflation forecasts, markets moving to price two rate hikes this year compared to lingering bets of a cut last month. This was aligned with the hawkish signals from the BoE and the SNB following their holds. Banks fell sharply as the inflationary concerns pressured sovereign bonds, with UniCredit, ING, Santander, and Intesa Sanpaolo sliding more than 4%. Industrials also fell with Schneider, Safran, and Airbus dropping 3.5%.

European stocks were sharply lower on Thursday, pressured by another surge in key energy prices and hawkish signals from major central banks in the continent. The Eurozone's STOXX 50 and the pan-European both fell over 2.5% to below the 5,600 mark and the 583 mark, respectively. European natural gas and power prices soared after Iran struck Qatari and Saudi energy infrastructure overnight, prompting the US to threaten Iranian gas fields. The surge in energy costs drove the ECB to hold rates unchanged but upwardly revise inflation forecasts, aligned with the hawkish signals from the BoE and the SNB following their holds. Banks fell sharply as the inflationary concerns pressured sovereign bonds, with UniCredit, ING, Santander, and Intesa Sanpaolo sliding more than 4%. Industrials also fell with Schneider and Airbus dropping 4.5%. Lastly, Prosus and Infineon tanked 5% and 7%, respectively, amid a global pullback in the AI space.

European shares tumbled on Thursday, dragged down by escalating Middle East tensions that pushed energy prices higher and dampened risk appetite ahead of key ECB and Bank of England rate decisions. The STOXX 50 dropped 2% to 5,620, its lowest level since late November, while the broader STOXX 600 fell 2% to a three-month low of 586, led by declines in industrials and miners as gold retreated. Heavy losses in major financial stocks added further pressure. While both the ECB and BoE are expected to hold rates steady, a fresh surge in European gas and Brent crude prices, amid deepening Iran-related tensions, has heightened economic risks, prompting markets to price in more rate hikes this year. Among standout movers, Logitech rose 2% after unveiling a $1.4 billion share buyback program.