The EuroStoxx 50, the main index of the Eurozone, experienced its third consecutive day of losses on Thursday, sliding 1.33 percent to 5,197.03 points. This marked the index’s lowest level since early May.
Geopolitical Tensions Weigh on Markets
The recent decline is primarily attributed to the ongoing geopolitical tensions and the conflict between Israel and Iran. This situation creates significant uncertainty in European markets and contributes to investor nervousness.
Risks from Rising Oil Prices
Particularly concerning is the fear of a potential energy price shock. A blockade of the Strait of Hormuz, a key route for oil transport in the Middle East, could drive Brent crude oil prices up to 100 US dollars. On Thursday, the oil price already surged above 78 dollars. Such a scenario poses the threat of economic stagnation amid rising inflation, increasing the likelihood of a global recession.
In addition to the EuroStoxx 50, other European indices such as the Swiss SMI (-0.74%) and the British FTSE 100 (-0.58%) also posted declines. Monetary policy decisions by central banks, such as the Swiss National Bank or the Bank of England, had little impact on the markets.
With US markets closed on Thursday due to a holiday, they could not provide any momentum either. Overall, there is a tense “watchful waiting” stance among market participants due to rising geopolitical risks.
This development underscores the vulnerability of European stock markets to geopolitical crises, particularly in the energy-sensitive Middle East region.