European Stocks Fall Sharply

European stocks closed sharply lower on Thursday, as the surge in energy prices risked higher interest rates in the Eurozone, while markets parsed a series of earnings results. The Euro STOXX 50 fell 1.7% to 6,210 and the STOXX Europe 600 dropped 1.3% to 638. UniCredit sank 4.8% despite posting results that reflected a strong quarter, as its ambition to acquire Germany's Commerzbank jeopardized its share buyback program. Meanwhile, BNP Paribas lost 2.8% despite beating profit estimates, tracking other banks after amid tighter financial conditions. The ECB held rate unchanged, as expected, and signaled that pro-inflationary risks may warrant more rate hikes in the future. Such risks were consolidated by a surge in gas prices as escalation to the US-Iran war further dented tanker flows from the region. Meanwhile, luxury stocks fell with LVMH, Hermes, and Ferrari dropping over 3.5%, pressured by poor results from Moncler.

European stocks extended their losses on Thursday, with the STOXX 50 falling 1.1% and the STOXX 600 down 0.9%, as investors digested a fresh batch of corporate earnings while surging oil prices and escalating hostilities in the Middle East continued to weigh on sentiment. As expected, the ECB left interest rates unchanged. STMicroelectronics tumbled more than 16%, making it the worst performer in the STOXX 600 after missing profit expectations. Nestlé dropped 7% after announcing an agreement to sell its stake in its Waters business to private equity firm Platinum Equity. UniCredit declined 4.4% despite reporting a 6.6% year-on-year increase in revenue and reaffirming its goal of acquiring Commerzbank in the fourth quarter. BNP Paribas also fell 2.1%, despite posting better-than-expected profit and revenue. On the upside, TotalEnergies gained 2.9% after reporting its strongest quarterly profit in three years, while Dassault Aviation surged 8.3% following stronger first-half earnings.

European stocks traded lower on Thursday, with the STOXX 50 and STOXX 600 both falling 0.8% as rising oil prices and escalating tensions in the Middle East weighed on sentiment. The US carried out strikes on Iran for a 12th consecutive day, while the Houthis claimed attacks on two Saudi oil tankers. Investors were also digesting a fresh round of corporate earnings while awaiting the ECB's monetary policy decision. BNP Paribas fell 1.2% despite reporting better-than-expected profit and revenue. UniCredit decreased 1.7% even after reporting a 6.6% yoy increase in revenues and saying it is aiming to acquire Commerzbank in Q4. Nestle tumbled more than 6%, after the company said it struck a deal to sell half of its waters business to private equity group Platinum Equity. In contrast, Total Energies added 1.8% after reporting its best quarterly profit in 3 years and Dassault Aviation jumped nearly 8% to top the STOXX 600 after reporting higher first-half earnings.