Europe: Shares sag as investors weigh Iran-Israel ceasefire
A RALLY in European stocks hit a roadblock as investors weighed the fragility of the Israel-Iran ceasefire, with attention quickly shifting to the looming US tariff pause deadline.
The pan-European Stoxx 600 index lost steam after Tuesday's best intraday jump in over a month, dipping 0.74 per cent to 536.98 as a wave of red swept across most sectors. Only four sectors bucked the trend.
Defence stocks jumped after Nato's pledge for a major boost in military spending. US President Donald Trump reassured allies of Washington's support.
Meanwhile, major regional bourses closed lower. Spain led the slide with a 1.6 per cent drop. Concerns over its defence budget shortfall lingered. Data showed its economy cooled to a 0.6 per cent growth pace in early 2025.
Germany shed 0.6 per cent, despite a new record investment budget, while France and Britain slipped 0.8 per cent and 0.5 per cent, respectively.
Across the geopolitical stage, the US-brokered ceasefire between Israel and Iran appeared to hold, though scepticism lingered.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Hopes for a durable peace rose after promising US-Iran talks, but investors remained cautious, eyeing the fast-approaching July 8 US tariff pause deadline as the EU scrambled to secure trade deals, with progress limited outside of an agreement with London.
'European stocks still face trade tensions and the ECB's easing and interest in European defense stocks are now no longer strong factors anymore,' said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
'That's why yesterday's rebound in the European stocks was overstretched and we might see some consolidation and even maybe some bearishness in the coming days.'
European auto stocks accelerated 1.3 per cent. Data showed May car sales rose 1.9 per cent year-on-year.
Stellantis rose 3 per cent after Jefferies upgraded the carmaker to 'buy' from 'hold'.
Babcock topped the Stoxx index with a 10.7 per cent rise after the British defence engineering company upgraded its medium-term guidance.
Shares of energy giants BP and Shell will be in focus on Thursday after the Wall Street Journal reported that Shell is in early talks to buy rival BP.
Meanwhile, Wall Street looked to Washington, where Fed Chair Jerome Powell struck a cautious tone in Senate testimony, pledging a 'careful approach' on future policy moves. REUTERS
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
20 minutes ago
- Straits Times
China hosts Iranian, Russian defence ministers against backdrop of ‘momentous change'
Chinese Defence Minister Dong Jun and his counterparts pose for a group photo before the Shanghai Cooperation Organisation Defence Ministers' Meeting in Qingdao on June 26. PHOTO: REUTERS QINGDAO, China - China hosted defence ministers from Iran and Russia for a meeting in its eastern seaside city of Qingdao on June 26 against the backdrop of war in the Middle East and a summit of Nato countries in Europe that agreed to boost military spending. Beijing has long sought to present the 10-member Shanghai Cooperation Organisation (SCO) as a counterweight to Western-led power blocs and has pushed to strengthen collaboration between its member countries in politics, security, trade and science. The Qingdao meeting of the organisation's top defence officials comes as a fledgling ceasefire between Israel and Iran holds after 12 days of fighting between the arch-foes. It is also being held the day after a summit of North Atlantic Treaty Organization (Nato) leaders in The Hague, where members agreed to ramp up their defence spending to satisfy US President Donald Trump. Chinese Defence Minister Dong Jun framed the June 26 meeting of officials in Qingdao, home to a major Chinese naval base, as a counterweight to a world in 'chaos and instability'. 'As momentous changes of the century accelerate, unilateralism and protectionism are on the rise,' Mr Dong said as he welcomed defence chiefs from Russia, Iran, Pakistan, Belarus and elsewhere on June 25 , according to state news agency Xinhua. 'Hegemonic, domineering and bullying acts severely undermine the international order,' he warned. He urged his counterparts to 'take more robust actions to jointly safeguard the environment for peaceful development'. Meeting Mr Dong on the sidelines of the summit, Russian Defence Minister Andrei Belousov hailed ties between the two countries as being 'at an unprecedentedly high level'. 'Friendly relations between our countries maintain upward dynamics of development in all directions,' he said. China has portrayed itself as a neutral party in Russia's war with Ukraine, although Western governments say its close ties have given Moscow crucial economic and diplomatic support. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.
CNA
24 minutes ago
- CNA
US hits back at accounts Iran moved uranium
WASHINGTON: President Donald Trump's administration hit back on Wednesday (Jun 25) at accounts Iran may have moved enriched uranium before US bombing, as a row grew on how much the strikes set back Tehran's nuclear programme. Trump, seeking credit for ordering military action and then quickly announcing a ceasefire between Israel and Iran, has lashed out angrily at media accounts of a classified report that doubted the extent of damage to Iranian nuclear sites. Another key question raised by experts is whether Iran, preparing for the strike, moved out some 400kg of enriched uranium - which could now be hidden elsewhere in the vast country. "I can tell you, the United States had no indication that that enriched uranium was moved prior to the strikes, as I also saw falsely reported," White House Press Secretary Karoline Leavitt told Fox News. "As for what's on the ground right now, it's buried under miles and miles of rubble because of the success of these strikes on Saturday evening," she said. Vice President JD Vance, asked about the uranium on Sunday, had sounded less definitive and said the United States would discuss the issue with Iran. "We're going to work in the coming weeks to ensure that we do something with that fuel," Vance told ABC News programme This Week. The quantity of uranium had been reported by the UN nuclear watchdog, the International Atomic Energy Agency, with which Iran is considering severing cooperation after the Israeli and US strikes on its nuclear programme. "The IAEA lost visibility on this material the moment hostilities began," the agency's chief, Rafael Grossi, told France 2 television. But he added: "I don't want to give the impression that it's been lost or hidden." TRUMP LASHES OUT The US military said it dropped 14 GBU-57 bunker-buster bombs - powerful 13,600kg weapons - on three Iranian nuclear sites. Trump has repeatedly said that the attack "obliterated" Iran's nuclear facilities, including the key site of Fordo buried inside a mountain. But an initial classified assessment, first reported by CNN, was said to have concluded that the strike did not destroy key components and that Iran's nuclear programme was set back only months at most. Trump furiously lashed out at the CNN reporter behind the story, taking to his Truth Social platform to demand that the network fire her. Trump also said that Defense Secretary Pete Hegseth, whom he dubbed "war" secretary, would hold a news conference at 8am on Thursday to "fight for the dignity of our great American pilots" after the media accounts on the efficacy of the strike he ordered. Trump's intelligence chiefs also pushed back on Wednesday. CIA Director John Ratcliffe in a statement said that new intelligence from a "historically reliable" source indicated that "several key Iranian nuclear facilities were destroyed and would have to be rebuilt over the course of years." Iran's government has said that its nuclear facilities were "badly damaged". The uranium in question is enriched to 60 per cent - above levels for civilian usage but still below weapons grade. The IAEA, in a report cited by the United States and Israel to justify their attacks, said that Iran was not complying with obligations but did not find that Tehran was making a nuclear bomb.
CNA
39 minutes ago
- CNA
Dollar slips on Fed credibility concerns, euro tops $1.1700
SYDNEY : The dollar slipped to multi-year lows against the euro and Swiss franc on Thursday as concerns about the future independence of the U.S. Federal Reserve undermined faith in the soundness of the country's monetary policy. According to a Wall Street Journal report, U.S. President Donald Trump had toyed with the idea of selecting and announcing Federal Reserve Chair Jerome Powell's replacement by September or October, aiming to undermine his position. "Markets are likely to bristle at any early move to name Powell's successor, particularly if the decision appears politically motivated," said Kieran Williams, head of Asia FX at InTouch Capital Markets. "The move would raise questions about the potential erosion of Fed independence and potentially weaken credibility," he added. "If this was the case it could recalibrate rate expectations, trigger reassessment of dollar positioning." Trump on Wednesday called Powell "terrible" for not lowering interest rates sharply, while the Fed Chair was telling the Senate that policy had to be cautious as the President's tariff plans were a risk to inflation. Markets have nudged up the chance of a rate cut at the Fed's next meeting in July to 25 per cent, from just 12 per cent a week ago, and are pricing in 64 basis points of cuts by year-end, up from around 46 basis points last Friday. "While this stands to be the latest hammer blow to the dollar delivered by the hands of the White House, I do expect it to gain some support in the coming sessions from month-end and quarter-end rebalancing flows," said Tony Sycamore, an analyst at IG. NOT SO EXCEPTIONAL For now, though, the dollar was under broad pressure as the euro gained 0.4 per cent to $1.1710, its highest since September 2021. The break of resistance at $1.1692 opened the way to the next chart target up at $1.1909. Sterling rose 0.3 per cent to $1.3723, its highest since January 2022, while the dollar was at its lowest in more than a decade on the Swiss franc at 0.8030. The franc also struck a record peak on the yen around 180.55. The dollar lost 0.4 per cent on the yen to 144.62, while the dollar index sank to its lowest since early 2022 at 97.401. Trump's chaotic tariff policies are also coming back into focus as the clock ticks down to his July 9 deadline for trade deals. JPMorgan on Wednesday warned the hit from tariffs would slow U.S. economic growth and lift inflation, resulting in a 40 per cent chance of a recession. "The risk of additional negative shocks is elevated, and we expect U.S. tariff rates to move higher," JPMorgan analysts wrote in their report. "The upshot of these developments is that our baseline scenario incorporates the end of a phase of U.S. exceptionalism." The ending of "exceptionalism" has been a major theme in the dollar's decline in recent months, as investors question its dominant reserve currency status and as the main safe haven among currencies. The euro has been a big beneficiary, with investors also hoping that massive new investment in European defence and infrastructure will bolster economic growth across the continent.
