BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - Uncertainty about the status of U.S.-Iran peace deal, inflation concerns due to the rise in oil prices, and fears of monetary tightening by central banks rendered the mood bearish on European markets on Thursday.
Middle East tensions linger following Iran dismissing the 15-point plan to pause the war, and saying that an end to the conflict will only occur on Tehran's own terms and timeline.
Meanwhile, an Israeli official has reportedly claimed that the Islamic Revolutionary Guard Corps (IRGC) Navy commander, Alireza Tangsiri, who 'was responsible for the closure of the Strait of Hormuz,' has been killed in a strike in Bandar Abbas.
European Central Bank member and Bundesbank President Joachim Nagel said that the central bank may hike interest rates at its next meeting in April 'if the war in the Middle East raises the spectre of an inflation surge in the Eurozone'.
ECB President Christine Lagarde said Wednesday that anything more than a short-lived spike in inflation could warrant an increase in interest rates.
Most of the markets across Europe, including Germany, France and the U.K., languished in negative territory right through the day's session.
The FTSE 100 fell 0.98%, Germany's DAX closed 1.02% down, and France's CAC 40 lost 0.98%, while Switzerland's SMI ended with a loss of 0.6%. The pan European Stoxx 600 closed down by 0.71%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Iceland, Ireland, Netherlands, Poland, Russia, Spain, Sweden and Türkiye closed with sharp to moderate losses.
Denmark and Norway ended notably higher, while Greece and Portugal edged up marginally.
In the UK market, shares from mining and financial sectors posted sharp losses.
3i Group tumbled 17.6% after Citigroup lowered the stock's target price.
Antofagasta lost 6.5%. Fresnillo and Anglo American Plc lost 4.8% and 3.9%, respectively. Endeavour Mining ended 3% down, and Rio Tinto closed lower by 2.03%, while Glencore finished with a loss of about 1.4%.
Bank stocks Natwest Group, Barclays, Lloyds Banking Group and Standard Chartered ended down by 1.5%-4%. HSBC Holdings drifted down by 1.1%.
Segro, Aviva, Pershing Square Holdings, Rolls-Royce Holdings, National Grid, Compass Group, Airtel Africa, Babcock International, Entain, Prudential, BAE Systems, Lion Finance Group, IAG, Halma, AstraZeneca and Barratt Redrow also declined sharply.
Next Plc shares climbed 4.2% after the company lifted its profit guidance for 2026. Next announced that its bottom line totaled GBP888.5 million, or GBP7.454 per share in 2025. This compares with GBP736.1 million, or GBP6.055 per share, in financial year 2024.
BP and Shell moved up 2.8% and 1.1%, respectively, lifted by higher oil prices.
JD Sports Fashion, Diageo, Convatec Group, Haleon and Bunzl also ended notably higher.
In the German market, Siemens Energy, Zalando, Rheinmetall, MTU Aero Engines, Commerzbank, Deutsche Bank, Porsche Automobil Holding, Vonovia, Scout24, RWE, SAP, Siemens, Fresenius and Deutsche Telekom lost 1%-5.5%.
BASF, Brenntag, Fresenius Medical Care, Adidas, Henkel and Beiersdorf closed on the positive side.
In the French market, Edenred tanked nearly 17% after Italy's competition authority opened an investigation into the group's local unit over suspected abuse of a dominant position in the meal voucher market.
Pernod Ricard closed lower by about 6.5%. Schneider Electric, ArcelorMittal, BNP Paribas, Legrand, Societe Generale, Airbus, Safran, Credit Agricole and Saint-Gobain lost 2%-4%.
Teleperformance, TotalEnergies, Sanofi, STMicroelectronics, Carrefour and Dassault Systemes gained 1%-4.3%.
On the economic front, survey results published by NIQ/GfK and the Nuremberg Institute for Market Decisions showed German consumer sentiment is set to deteriorate in April due to economic concerns over the war in Iran.
The forward-looking consumer sentiment index fell to -28.0 in April from -24.8 in the previous month. The score was forecast to fall moderately to -27.3.
Data published by the European Central Bank showed Eurozone private sector credit grew at a slightly slower pace in February ahead of the war in Iran.
Loans to the private sector expanded 3.3% in February, slightly slower than the 3.4% increase in January.
Adjusted loans to households posted an annual growth of 3%, the same rate as in the previous month. Meanwhile, loans to non-financial corporations grew at a slower pace of 2.9%, following a 2.8% rise in January.
Survey results from the statistical office INSEE showed France's consumer sentiment decreased in March to the lowest level in four months amid future inflationary concerns.
The consumer sentiment index dropped to 89 from 91 in the prior month, as expected.
French manufacturing sentiment weakened to a four-month low in March largely due to lower past production and order book levels, survey results from the statistical office INSEE showed.
The manufacturing confidence index fell to 99 in March from 102 in February. The score was forecast to drop to 100. This was the lowest since November.
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