European Stocks Decline Due to Middle East Tensions

The escalation of military confrontation in the Middle East has changed the situation on European stock exchanges. Rising oil prices have once again increased the risk of inflation growth.

On Friday, European shares initially rose against the backdrop of good results from technology companies, but later began to decline. The reason was information circulating about military confrontation between the United States and Iran.

The pan-European STOXX 600 index fell approximately 2% over the week. This is the largest one-week decline since mid-April.

Stock prices were affected by US airstrikes on Iranian targets and Iran's retaliatory attacks. Due to the confrontation, the movement of ships in the Strait of Hormuz has almost stopped. This route is particularly important for international oil supply.

The price of Brent crude oil rose to $77 per barrel. The rise in oil prices poses a threat of increasing inflation and reduces the likelihood that central banks will soon lower interest rates.

Due to the geopolitical situation, investors' attention overlooked the $26.5 billion fundraising on the US exchange by South Korean company SK Hynix. This is one of the largest initial public offerings (IPO) in history.

Despite the tension on the market, shares of several companies rose in price. EasyJet's share price increased by 13%, Vodafone's shares rose by 12%, while St James's Place's share price fell by approximately 5%.

Source: Investing.com