Key Takeaways:
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European markets fell as rising Middle East tensions pushed oil prices higher.
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Stoxx 600 down 0.3%, extending losses in 8 of last 9 sessions.
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Brent crude nears $78, up 20% in a month on supply disruption fears.
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Norges Bank unexpectedly cut rates, while BoE held steady and SNB cut as expected.
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Banking stocks mostly weaker, but Deutsche Bank & Commerzbank bucked the trend.
Geopolitical Worries Weigh on Markets
European stocks slipped on Thursday as escalating Middle East tensions drove oil prices higher, while investors digested central bank decisions from the UK, Switzerland, and Norway.
The Stoxx 600 fell 0.3% to 538.56, with losses across major indices. The benchmark has now declined in 8 of the last 9 sessions, shedding ~2.7% since June 6.
Axel Rudolph, Senior Technical Analyst at IG, noted:
*”Ongoing Israel-Iran missile attacks and potential US involvement have raised fears of supply disruptions, pushing oil and gas to 4-month highs.”*
Oil Prices Climb on Supply Fears
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Brent crude rose above $78, nearing January highs.
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Prices have surged 20% in a month amid geopolitical risks.
Central Bank Decisions in Focus
1. Bank of England (BoE) – Rates Unchanged
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Held at 5.25%, as expected.
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Markets now eyeing potential August cut.
2. Swiss National Bank (SNB) – Second Cut in 2024
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Reduced rates by 25bps to 1.25%, following June’s cut.
3. Norges Bank – Surprise Rate Cut
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Lowered rates by 25bps to 4.25%, contrary to expectations of a hold.
Sector Movers: Banks Under Pressure
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Societe Generale, BNP Paribas, HSBC, Barclays, UBS all declined.
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Deutsche Bank & Commerzbank edged higher, bucking the trend.
Biggest Fallers
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Revolution Beauty (UK) – Plunged 35% after Frasers Group abandoned takeover talks.
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Randstad & Adecco – Fell sharply after Hays issued a profit warning.
Outlook: Will Markets Recover?
With Middle East tensions lingering and oil prices elevated, European equities face near-term pressure. Investors will watch:
✔ Further geopolitical developments
✔ US Fed’s next move
✔ Eurozone economic data (after April construction output rose 1.7%)
Bottom Line: Risk-off sentiment prevails, but bargain hunters may step in if tensions ease.
