European Stocks Fall on Thursday

Stocks in Europe traded lower on Thursday, with the STOXX 50 falling 0.3% and the STOXX 600 down 0.5%, as market volatility persisted amid ongoing tensions in the Middle East and sharp swings in oil prices, which remain well above pre-conflict levels. In the latest developments, both the US and Iran launched new strikes, keeping investors on edge. Luxury, cyclical, pharmaceutical, and financial stocks led the declines, while the technology sector outperformed. Among major movers, HSBC Holdings (-1.4%), Novartis (-1.8%), AstraZeneca (-2.6%), Bayer (-2.1%), LVMH (-1.5%), Hermès (-1.8%), and Intesa Sanpaolo (-1.2%) traded lower. In contrast, ASML Holding (+0.5%), Shell (+0.3%), and STMicroelectronics (+2.5%) posted gains.

European equity markets were set for a weaker open on Thursday as renewed hostilities between the US and Iran reduced hopes for a near-term peace agreement that could end the conflict and reopen the Strait of Hormuz. The two sides also remained deadlocked over several key issues, including Tehran’s insistence on retaining control of Hormuz and preserving its nuclear program. In Europe, investors will focus on upcoming Eurozone business and consumer confidence data, while the corporate calendar remains quiet with no major earnings releases scheduled. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both down around 0.8%.

European stocks closed marginally above the flatline on Wednesday following sharp losses the prior session, supported by a pullback in energy prices that triggered some respite for European sovereign yields. The Eurozone's STOXX 50 gained 0.2% to 6,078 and the pan-European STOXX 600 gained 0.1% to 628. Iran stated it had an unofficial draft of an agreement with the US that would end their conflict and reestablish trade through the Strait of Hormuz. Oil and gas prices fell even though the US rejected the concessions, halting slide in equities from last session. LVMH, Hermes, Adidas, and L'Oreal added between 2.5% and 5.5% to set a strong session for high-end consumer cyclical brands. Meanwhile, Santander and Intesa Sanpaolo added 1.5% to lead the banks. On the other hand, TotalEnergies and ENI sank more than 2% amid the drop in oil prices.