European shares hit near three-week low on Middle East impasse, mixed earnings

EUROPEAN shares ended near a three-week low on Tuesday as mixed corporate earnings, uncertainty over the Middle East conflict, and caution ahead of major central bank decisions later this week weighed on sentiment.

The pan-European Stoxx 600 declined 0.4 per cent to 606.58 points. Most major regional markets closed lower, with Frankfurt’s DAX down 0.3 per cent, its seventh consecutive session of declines and the longest such streak since 2024.

Hopes for renewed US-Iran talks faded after officials in Washington indicated that President Donald Trump was dissatisfied with Teheran’s latest proposal to resolve the two-month-long war.

The war has roiled global markets, pushing crude prices higher and fuelling concerns about inflation and growth, as the vital Strait of Hormuz remains choked.

Investors will thus closely monitor this week’s European Central Bank and Bank of England’s meetings for cues on growth, inflation and outlook on interest rates. Market participants are also tracking how the Iran war is affecting companies’ outlook as they report earnings.

“We’ve rallied a very long way without a significant pullback and there is a danger if the central banks play up inflation and high energy costs and hint at rate hikes rather than keeping things on hold. That could be a trigger for a bit more of a selloff,” said David Morrison, senior market analyst at Trade Nation.

Optimism surrounding technology and AI has helped Wall Street and other global markets rebound from a sharp selloff in March, but energy-dependent European equities still remain below pre-war levels.

European tech stocks slid 1.9 per cent on Tuesday, tracking losses on Wall Street amid growing scepticism on whether the AI boom would translate into growth.

Barclays pared earlier losses, ending 0.2 per cent lower after the British bank flagged a US$308 million hit linked to collapsed lender MFS.

SEE ALSO

US stocks: Nasdaq, S&P 500 end lower on renewed AI growth worries ahead of big tech earnings

The broader banking index, however, gained 1.3 per cent, helping curb losses on the Stoxx index.

The energy index was up 0.6 per cent, lifted by BP, which gained 1.1 per cent after it beat first-quarter profit estimates.

Meanwhile, a key ECB survey showed Euro zone consumers sharply raised their inflation expectations in March.

Among other movers, Norway’s Telenor slipped 5.7 per cent after posting first-quarter core earnings below expectations.

Biotechnology company Qiagen slumped 10.8 per cent after cutting its full-year earnings outlook.

Norwegian Air Shuttle climbed 5.9 per cent after the budget airline reported a lower-than-expected operating loss. REUTERS