European stocks slip as lack of progress on US-Iran peace lifts oil, yields

EUROPEAN shares closed lower on Wednesday (Sep 23) as oil prices rebounded to over US$100 a barrel, pushing up government bond yields again as the Iran conflict showed no signs of an end.

The benchmark pan-European Stoxx 600 ended 0.44 per cent lower at 639.92, reversing its gains from earlier in the session. Most major regional bourses also lost ground.

Brent crude futures rose over 1 per cent, topping the crucial US$100 a barrel. They held at their lowest levels in two weeks, hit after five sessions of declines.

Markets parsed through duelling speeches from Iran and the US at the UN General Assembly. Iranian President Masoud Pezeshkian said that Teheran would never surrender to the US, a day after US President Donald Trump used the same forum to threaten to “annihilate” Iran.

The yield on Germany’s 10-year bond, the benchmark for the euro zone, was last at 3.55 per cent, while the US 10-year Treasury yield rose to 5.085 per cent, its highest since 2007.

“There was clearly some hope that there would be some dialogue that could hasten the end of the conflict, but it doesn’t seem that there was much progress,” said Steve Sosnick, chief market analyst at Interactive Brokers.

“We’ve come a long way in a short period of time, so we were set up for a little bit of profit taking today.”

Most major sectors on the Stoxx 600 were lower, except for energy shares that rose 1.3 per cent.

Heavyweight bank stocks lost 0.4 per cent, while insurance and construction and materials were the biggest percentage decliners, down 1.7 per cent and 1.3 per cent respectively.

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The moves come after global markets rallied sharply earlier this week. The Stoxx 600 is still 0.8 per cent higher this week, after marking declines for the last three weeks, as oil prices and bond yields rallied, and the European Central Bank delivered its second interest rate hike this year.

Separately, an S&P Global PMI survey showed business activity across the euro zone accelerated this month at its fastest pace in more than three years, defying expectations for a slowdown.

Traders are also awaiting a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping, which would be closely watched for clues on trade relations and the global economic outlook.

Among individual stocks, Arcadis lost 2.9 per cent, after Canadian engineering firm WSP Global dropped its takeover bid for the Dutch consultancy and engineering firm.

KWS shed 9 per cent after the German seed producer’s annual net sales fell 3 per cent to 1.63 billion euros (US$1.86 billion), missing IBES estimate of 1.68 billion euros, hit by lower sugarbeet and corn acreage.

Shares of Adyen slipped 4.7 per cent after the Dutch payments processor named Klarna’s Niclas Neglen as its next chief financial officer, effective Feb 1, 2027. REUTERS