European stocks flat as markets weigh Iran tensions, await economic data
The pan-European Stoxx 600 closed unchanged at 654.21 points
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EUROPEAN shares were flat on Monday (Aug 24) as markets monitored US-Iran developments and looked ahead to a busy week of economic data that could offer fresh clues on the European Central Bank’s policy path.
Meanwhile, US Treasury Secretary Scott Bessent announced tougher US secondary sanctions on countries with trade ties to Iran announced, and separately, Pakistan’s army chief is in Teheran to bring Iran back to the negotiating table.
“There are a lot of unknowns riding on this (sanctions) at the moment,” said Chris Beauchamp, chief market analyst, IG Group.
“If you have a situation where the US action is taken as a threat to the Iranian economy and they respond in the only way they can and then take action in the Strait of Hormuz, it would be particularly bad for European markets.”
The pan-European Stoxx 600 closed unchanged at 654.21 points.
The new sanctions follows fears of prolonged inflation that gripped global markets last week as US Treasury yields hit a multi-decade high amid persisting tensions in the Middle East that have kept oil prices elevated.
Among sectors, energy-intensive travel and leisure stocks led gains, rising 1.7 per cent as Brent crude declined 1.9 per cent.
Media and personal and household goods shares rose 1.4 per cent.
The benchmark Stoxx 600 has pulled back in recent weeks after reaching record highs earlier in August on an earnings-fuelled rally with inflation concerns taking centre stage.
Money markets are pricing in a more hawkish move from the European Central Bank, betting geopolitical tensions could keep price pressures elevated and drive the deposit rate close to 3 per cent by late 2027.
Investors are also awaiting a string of economic releases this week, including German and French GDP data, the German Ifo survey and Spanish inflation figures, that could test expectations for a more hawkish ECB amid renewed pressure from energy prices.
Energy fell 1.6 per cent, tracking oil, to be the worst-performing sector. Defence stocks also slipped 1 per cent.
Automobiles and parts fell 1 per cent despite data showing European EV sales picked up in July.
Meanwhile, the tech sector slipped 0.8 per cent ahead of Nvidia’s results on Wednesday, with lingering concerns about whether the chipmaker can meet stratospheric expectations. REUTERS
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