European Stocks Close Lower on War Escalation

European equities closed sharply lower on their first trading day since last Thursday as concerns of escalation in the Middle East conflict deepened risks of an energy crisis in major European oil and gas importers. The Eurozone's STOXX 50 dropped 1.1% to 5,630 and the STOXX 600 fell 1% to 591. US President Trump escalated the threat of attacks to happen overnight in a last bid to strike a deal with Iran, although Tehran stated it cut its communication channels with Washington to raise concerns that strikes in the region will become more aggressive. The resulting increase in oil and natural gas prices lifted bond yields pressed industrial companies, with Siemens, Schneider, and Airbus dropping nearly 2%. Meanwhile, ASML dropped 4% after US lawmakers unveiled the MATCH Act that would strengthen existing restrictions on semiconductor manufacturing equipment sales, aiming to restrict exports of chip tools to China.

European equities traded choppily on Tuesday, with the STOXX 50 and STOXX 600 swinging between slight gains and losses, as investors returned from the Easter break and monitored developments in the Middle East. The war with Iran entered a sixth week and President Trump warned that if no agreement is reached by his Tuesday deadline, the US military could target key Iranian infrastructures. He also stated that talks with Iran are “going well” and emphasised that reopening the strait remains “a very big priority”. Oil prices remained volatile amid the ongoing tensions. Basic materials, financials, consumer cyclicals and non-cyclicals led gains, while tech stocks lagged. LVMH (1.3%), Nestle (1.4%), Hermes (1.8%), Unilever (1%) were higher. On the other hand, ASML Holding fell around 3% as US lawmakers unveiled the MATCH Act that would strengthen existing restrictions on semiconductor manufacturing equipment sales, aiming to restrict exports of chip tools to China.

European stocks moved higher on Tuesday after a subdued open, with the STOXX 50 rising 0.8% and the STOXX 600 gaining 0.7%, as investors returned from the Easter break and continued to assess developments in the Middle East. The war with Iran entered a sixth week and President Trump warned that if no agreement is reached by his Tuesday deadline, the US military could target key Iranian infrastructures. He also stated that talks with Iran are “going well” and emphasised that reopening the strait remains “a very big priority”. Oil prices remained volatile amid the ongoing tensions. Financials, consumer cyclicals and non-cyclicals led gains, while tech stocks lagged. LVMH (1.7%), Nestle (1.3%), Hermes (2%), Unilever (1.1%) were higher. On the other hand, ASML Holding fell around 3% as US lawmakers unveiled the MATCH Act that would strengthen existing restrictions on semiconductor manufacturing equipment sales, aiming to restrict exports of chip tools to China.