European Stocks Plunge Amid Iran Tensions

European stocks experienced a significant decline at the beginning of the new trading week, mirroring a downturn in Asian markets, primarily driven by escalating tensions from the ongoing Iran war which is adversely affecting global market sentiment. The pan-European Stoxx 600 index dropped 1.9% shortly after the market opened in London, with all major sectors and bourses showing negative movement. Basic resources and industrial stocks were particularly hard hit, falling by 3.1% and 2.6%, respectively, as investors moved away from gold and precious metals, with spot gold prices dropping 5.2%.

The market’s decline followed a sell-off in Asia, fueled by concerns regarding the Iran war and the blockage of the vital Strait of Hormuz. U.S. President Donald Trump threatened to “obliterate” Iran’s power plants if the Strait was not reopened within 48 hours, prompting Iran to make further threats against U.S. interests and energy infrastructure.

In corporate news, Poste Italiane saw its shares tumble by 7.3% after announcing plans to acquire Telecom Italia in a deal valued at €10.8 billion. Conversely, Telecom Italia’s shares rose by 3.9%. Delivery Hero’s stock rose by 2.4% after agreeing to sell its Taiwanese delivery operations to Grab Holdings for $600 million.

Crude oil prices were volatile, with Brent crude rising by 1.3% to $113.70, amidst lower trading in Asia-Pacific markets. U.S. stock futures also declined as major benchmarks faced their fourth consecutive weekly loss. Upcoming earnings reports in Europe are expected from Kongsberg Gruppen, Exor, and Galp Energia, and trade balance data from Spain is set to be released.

SOURCE: CNBC