PARIS, March 19 (Reuters) – European stock markets closed significantly lower amid high volatility, bond tensions, soaring energy prices, and warnings from several major central banks as the ongoing conflict in the Middle East now extends to energy infrastructure.
In Paris, the CAC 40 index ended with a loss of 2.03% at 7,807.87 points. The British FTSE dropped by 2.35% and the German Dax fell by 2.82%. The EuroStoxx 50 index lost 2.14%, the FTSEurofirst 300 2.39%, and the Stoxx 600 2.39% as well.
As European markets closed, the Dow Jones was down by 0.89%, the S&P 500 by 0.74%, and the Nasdaq by 0.90%, reflecting fears of a resurgence in inflation affecting investor sentiment.
Iranian air strikes since Wednesday caused significant damage to the world’s largest gas complex in Qatar and targeted a Saudi Aramco-ExxonMobil refinery in Saudi Arabia. The United Arab Emirates closed gas facilities and two Kuwaiti refineries are on fire.
Despite U.S. Treasury Secretary Scott Bessent’s remarks that Washington may soon lift sanctions on Iranian oil exports to increase global supply and lower prices, concerns persisted.
Amid escalated Middle East tensions, gas and oil prices surged while the EuroStoxx 50 volatility index soared over 10% above 30 points.
In this environment, central banks in the eurozone, U.S., Canada, Japan, U.K., Sweden, and Switzerland issued warnings about growth and inflation risks in their respective statements.
European energy companies Equinor (+11.03%), Var Energi (+12.69%), and Aker BP (+6.97%) were among the top performers in the Stoxx 600 due to rising oil prices.
The day’s economic indicators included a decrease in U.S. weekly jobless claims to 205,000, improved business conditions in the Philadelphia region, and lower-than-expected UK annual wage growth.
The U.S. dollar fell by 0.52% against a basket of international currencies while the euro gained 0.81% and the British pound rose by 0.94% following the ECB and BOE’s decision to keep interest rates unchanged amid Middle East tensions.
Bond yields, such as the German Bund’s and U.S. Treasury’s, experienced fluctuations due to caution from the Bank of England and the European Central Bank in the context of the Middle East conflict.
The Brent crude oil price exceeded $119 per barrel on Thursday after Iran attacked energy facilities following Israeli strikes on its South Pars gas field, a major escalation in the conflict.
By 17:00 GMT, Brent was up 2.49% at $110.09 per barrel, and West Texas Intermediate (WTI) crude oil rose by 1.63% to $97.89. The Dutch TTF gas price hit 74 euros/MWh, its highest level since January 10, 2023.
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Context: This news article discusses the impact of escalating tensions in the Middle East on global stock markets, energy prices, and financial indicators. The conflict occurred amid concerns about inflation and economic growth, leading to significant market fluctuations.
