European stock markets moved lower on Thursday as rising oil prices and continuing tensions in the Middle East renewed concerns about inflation, energy costs and the outlook for economic growth across the continent.
The pan-European STOXX 600 slipped around 0.1% to 650.23 points, while Germany’s DAX fell about 0.5%. Market data also showed declines in Britain’s FTSE 100 and France’s CAC 40 during the session.
Energy prices were at the center of investors’ concerns. Brent crude climbed to around $93 a barrel, reaching a three-week high as uncertainty surrounding the Iran conflict raised fears of continued disruption to supplies from the Middle East.
Higher energy prices present a particular challenge for European economies because they can raise transportation and production costs, feed into consumer inflation and complicate monetary-policy decisions. The International Energy Agency has identified the restoration of normal oil flows through the Strait of Hormuz as a key factor in reducing pressure on global energy supplies and prices.
The impact was uneven across European sectors. Energy stocks gained about 0.4% as oil prices increased, while travel and leisure shares dropped roughly 0.6% and basic-resource stocks declined around 0.9%.
Investors are now closely watching developments in the Middle East and global bond markets. A prolonged period of elevated oil prices could keep inflationary pressures alive and increase uncertainty over Europe’s economic outlook, leaving financial markets particularly sensitive to further geopolitical developments.
