European stock markets showed a lackluster performance, influenced by the escalating crisis in the Middle East. However, rising oil prices provided a boost to energy stocks. The Stoxx Europe 600 Index ended flat.
Utility, retail, travel, and leisure sectors led the declines, while the energy sector index increased by approximately 1.6%. Shares of JD Sports Fashion Plc dropped following news of a decline in quarterly revenue by its supplier, Nike.
Defense stocks such as Saab and Rheinmetall saw gains after Iran launched around 200 ballistic missiles at Israel, prompting Israel to vow retaliation. The heightened conflict raises concerns of a broader Middle Eastern war.
Ulrich Urbahn, head of multi-asset strategy and research at Berenberg, mentioned they maintain a balanced stance and slightly overweight risk assets like stocks and commodities, as the macroeconomic environment remains favorable despite geopolitical risks. Urbahn also noted that he does not anticipate a recession.
