Key Takeaways
- European shares declined on Wednesday.
- Brent crude surpassed $100 per barrel.
- Risk appetite was curbed by rising oil prices and Middle East tensions.
European shares fell on Wednesday, with the pan-European STOXX 600 down 0.7% at 645.34 points as of 0835 GMT.
Germany’s DAX index edged 0.7% lower, while London’s FTSE lost 0.3% and France’s CAC 40 slipped 0.9%.
However, Helsinki’s blue chips were a bright spot, firming 1.6% to their highest in nearly three months.
Fortum, a Finnish energy group, led gains on the STOXX 600, climbing 9.6% after signing a long-term power purchase agreement with Google.
Google announced it would invest at least €13 billion ($15.1 billion) in AI infrastructure in Finland over two years.
The Middle East conflict escalated as Iranian-backed Houthi forces in Yemen launched strikes on several Saudi cities.
These attacks threaten to deepen disruptions to Middle East oil supplies, already strained by regional strikes and key shipping lane issues.
Brent crude prices hit above $100 per barrel, breaching the symbolic barrier for the first time since July 24.
Ipek Ozkardeskaya, senior analyst at Swissquote, stated, 'Risk appetite remains weak as rising oil prices occupy the headlines – and investors’ minds.'
Europe’s heavy dependence on imported energy leaves the region vulnerable to rising oil prices, which have rekindled inflation concerns.
Traders widely expect the European Central Bank (ECB) to raise rates on Thursday, with German consumer price data due on the same day.
Among individual movers, shares of Auto1 Group SE fell 3% after Christian Wallentin stepped down as CFO of the German-based online platform.
Zara owner Inditex dropped 2.9% after the Spanish fast-fashion retailer reported weaker than expected second-quarter profit.
Risk appetite remains weak as rising oil prices occupy the headlines – and investors’ minds.
Ipek Ozkardeskaya, Senior analyst at Swissquote
