European stocks resumed their decline today after U.S. President Donald Trump announced the continuation of attacks on Iran. The pan-European STOXX Europe 600 index, which tracks trading on stock exchanges in the UK and selected EU countries, was down about 1% shortly after 9:00 a.m. CEST, hovering near 592 points. On Wednesday, the index gained 2.5 percent on hopes that the United States would end the war with Iran soon.
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Middle East Tensions Escalate: Oil Prices Surge as Markets React
However, in a televised address to the American people, Trump stated that the United States would launch extremely harsh strikes against Iran over the next two or three weeks. This led to a rise in oil prices and renewed concerns about the negative impact of the conflict in the Middle East on economic growth and inflation. Due to higher oil prices, shares of airlines such as Air France-KLM and Lufthansa came under pressure today, Reuters reported.
The conflict in the Middle East, which began in late February with U.S.-Israeli attacks on Iran, has led to a sharp rise in energy prices on global markets. This is because it has paralyzed shipping in the crucial Strait of Hormuz, through which about one-fifth of the world’s oil and gas supplies normally pass.
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Global Markets Slide: European and Asian Stocks React to Rising Tensions
Shortly after 9:00 a.m. CEST, Germany’s main stock index, the DAX, was down nearly 1.5 percent, falling back below the 23,000-point mark. France’s CAC 40 index lost about one percent, while London’s main FTSE 100 index fell by just 0.2 percent.
Asian stock markets also came under pressure following Trump’s speech. For example, the Nikkei 225, the main index of the Tokyo Stock Exchange, fell 2.38 percent today and closed at 52,463.27 points.
Source: Reuters
