Source: Sharecast
This weekend's decision by US president Donald Trump to attack Iran's nuclear installations dampened risk appetite across global financial markets and sparked volatility in commodity markets.
Brent crude surged to a high of $81.40 a barrel early on, hitting levels not seen since January on the back of supply disruption concerns, before slipping to a 0.2% loss by the close in Europe to $76.89.
After dropping as much as 0.8% early on, the Stoxx closed down 0.3% at 535.03, its lowest finish since 7 May. Moderate losses of 0.1-0.4% were seen in London, Zurich, Frankfurt and Madrid, along with steeper declines in Paris (-0.7%) and Milan (-1.0%).
US forces on the weekend launched a surprise attack against three nuclear sites in Fordo, Isfahan and Natanz. Trump on Friday said initially that he would make a decision to attack Iran “within the next two weeks” and join Israel's war against its neighbour.
Iran’s regime threatened to close the Strait of Hormuz – a key oil supply gateway – creating inflationary fears among investors. Goldman Sachs analysts predicted that disruptions to shipping through the strait could push the price of Brent crude beyond $100 a – its highest level since August 2022.
Meanwhile, International Monetary Fund head Kristalina Georgieva warned that the attacks could hit global growth and warned of "secondary and tertiary" economic impacts. "Let’s say there is more turbulence that goes into hitting growth prospects in large economies — then you have a trigger impact of downward revisions in prospects for global growth," she said.
In economic news, the S&P Global/HCOB composite PMI for the eurozone came in at 50.2 for June, unchanged from May's reading. This was the sixth straight month of expansion, but under the consensus forecast of 50.5. The service-sector PMI rose to 50.0 from 49.7, while the manufacturing PMI was unchanged at 49.4.
Market movers
London-listed Spectris was a high riser on the Stoxx 600, with shares in the instrumentation business up 16% after a bidding war between Advent and KKR started to heat up. Private equity investor Advent said that it had reached an agreement on the terms of a recommended cash acquisition, while KKR said it was "actively engaged" in the advanced stages of due diligence and arranging financing commitments.
Oil stocks were mixed across the continent as crude prices struggled for direction late on, with Sanofi and TotalEnergies ending lower and BP and Shell on the up.
Airlines fell amid the prospect of higher fuel costs, with easyJet, IAG, Air-France KLM and Deutsche Lufthansa all flying lower.
