·
·
Economy
Reuters reported that the main European stock index fell more than 1% on Thursday as hopes for a swift end to the conflict in the Middle East faded after US President Donald Trump threatened further attacks on Iran.
The pan-European STOXX 600 index fell 1.2% to 589.99 points by 07:25 GMT. The index is on track for a weekly gain.
Technology stocks fell around 3%, leading declines across various sectors, while mining stocks dropped 2.7%, hurt by falling precious metal prices.
Market sentiment soured after Trump said: "We are going to hit them very hard in the next two or three weeks. We are going to send them back to the Stone Age where they belong."
Brent crude crossed the $100-per-barrel mark, rising about 7%, with energy stocks up about 1.2%, making the energy sector the only major sector to record gains.
Rising oil prices pressured airline stocks such as Air France and Lufthansa, which fell more than 3.7% each.
The STOXX 600 had jumped more than 2% on Wednesday after Trump said Washington would soon end hostilities with Iran, reflecting the volatility investors have had to deal with for over a month.
The continued delay in reopening the Strait of Hormuz — a strategic waterway for major European imports — continues to weigh on stocks and fuel growing concerns about inflation and growth.
Data compiled by the London Stock Exchange Group showed that interest rate futures point to at least three expected rate hikes of 25 basis points each by year-end. Markets had expected no change in European Central Bank monetary policy before the war.
