Khaberni - The European markets enter a new week amid a state of caution and anticipation, with escalating geopolitical pressures and rising energy costs, increasing investor volatility and clearly affecting risk appetite.
European stocks fell slightly on Wednesday as investors awaited a busy agenda of central bank meetings, while concerns over stalling peace talks between the United States and Iran led to rising crude oil prices, limiting risk appetite.
On the other hand, as US stocks climbed to record levels driven by the technology sector, European stocks linked to the energy sector fell amid indications from several companies that their earnings were affected by the war with Iran.
"Every week the war continues, things get worse for Europe, and therefore the markets take that into account. That's why we saw American stocks outperform their European counterparts," said Kathleen Brooks, research director at XTB.
According to Reuters, the European "STOXX 600" index closed down 0.3% at 608.84 points, ending a four-week gain streak, after it recorded a loss of 2.5% the previous week.
The main regional exchanges also followed this decline, with the British "Financial Times 100" index dropping 0.6%, and the German "DAX" index falling 0.2%, marking losses for the sixth consecutive session.
"It is likely that the weak performance of the STOXX 600 index compared to U.S. stocks, driven by technology companies, will continue in the coming days, amid declining economic expectations in Europe," said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
She added, "I believe that the economic repercussions of rising energy prices and declining global growth expectations will have a more significant impact on European stocks compared to their counterparts in the United States."
Technology and basic consumer goods sectors were among the main pressures on the "STOXX 600" index, as both sectors fell by 1.3% and 0.5% respectively, on Monday.
The share of British company "Intertek" also fell by 2.2%, after the product testing company rejected an adjusted acquisition offer of 54 British pounds per share from the Swedish private investment group "EQT AB".
The oil and gas index fell 1.1%, after gains in previous sessions.
With oil prices stabilizing above $100 per barrel, markets are anticipating monetary policy meetings from both the European Central Bank and the Bank of England this week, looking for any signs regarding the possibility of raising interest rates to curb inflationary pressures.
In a related context, a recent survey showed that consumer confidence in Germany has dropped to its lowest level in three years, affected by rising energy prices and escalating inflation rates.
