European Stocks Head for Lower Open

European stock markets retreated to two-week lows on Thursday, with the STOXX 50 dipping 0.4% to 5,880 points and the broader STOXX 600 declining 0.4% to 613. The drop came as escalating tensions in the Strait of Hormuz, compounded by the absence of US-Iran peace talks, drove oil prices higher and reignited inflation fears. Investors also digested fresh PMI data and a wave of corporate earnings reports. Among individual stocks, L’Oréal surged 8% after posting stronger-than-expected growth in its post-market Wednesday report. Nokia also jumped 8% following a better-than-anticipated increase in quarterly comparable operating profit. Roche held steady, while Nestlé rose 6% despite both companies reporting declines in Q1 sales. Sanofi advanced 1.7% after a 6.2% increase in Q1 net sales, and Renault gained 2.3% as its Q1 revenue climbed 7.3%.

European equity markets were poised to open lower on Thursday as stalled US-Iran peace negotiations weighed on risk sentiment. The Strait of Hormuz also remains effectively closed as Tehran continues to control the strategic waterway, while the US blockade of Iranian ports stays in place, keeping energy prices elevated and inflation risks heightened. In Europe, market participants will focus on Eurozone new car registrations and French business confidence data, alongside April PMI releases across the region. On the corporate side, earnings reports are due from SAP, Safran, Sanofi, Orange, and Dassault Systemes, among others. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were down 0.7% and 0.6%, respectively.

European stocks closed lower for a third session on Wednesday amid persistent pressure from higher energy prices amid geopolitical tensions in the Middle East. The Eurozone's STOXX 50 dropped 0.5% to 5,900 and the pan-European STOXX 600 fell 0.3% to 614. Oil and gas prices rose after Iran struck and seized commercial vessels near the Strait of Hormuz after US President Trump said he would extend the ceasefire with Iran indefinitely, just before its expiration, but held the blockade on the chokepoint. The risk-off sentiment in Europe pressed discretionary goods companies with LVMH and Adidas dropping 2.5%. Higher power costs also dented industrials with Safran and Airbus dropping 3.5% and 2.5%, respectively. In the meantime, Deutsche Telekom sank 4.6% on the potential of a merger with its US arm T-Mobile. On the other hand, Siemens Energy surged 7.1% after posting strong results.