European stocks close lower on geopolitical tensions

A man walks through the trading room at the stock exchange. (is associated with: «European stocks close lower on geopolitical tensions») Andreas Arnold/dpa

European stocks closed mostly weak on Thursday as oil prices rose sharply following the collapse of peace talks between Iran and the US. Data showing an increase in German producer price inflation in the month of July weighed as well on sentiment.

Brent Crude futures rose to over $94 a barrel, gaining about 2.7%, after US President Donald Trump sharpened his rhetoric against Tehran, warning of economic consequences against any country that provided “any type of lifeline to Iran.”

Asked about the Iran war, Trump reiterated that the US has “complete control” of the Strait of Hormuz and that the talks could resume “maybe at some point.”

Iran’s Foreign Minister Abbas Araghchi said Trump’s “doubling down on failed policies will only bring further defeat” to the US.

The pan-European Stoxx 600 ended 0.12% down. Germany’s DAX and France’s CAC 40 closed lower by 0.42% and 0.57%, respectively. The UK’s FTSE 100 edged up 0.04%, while Switzerland’s SMI settled lower by 0.13%.

Among other markets in Europe, Austria, Finland, Norway, Poland, Russia, Spain and Turkey closed weak.

Greece, Iceland, Ireland, Portugal and Sweden ended higher, while Belgium, the Czech Republic, Denmark and the Netherlands closed flat.

In the UK market, Weir climbed more than 4%. Fresnillo, BP, Endeavour Mining, Dieago, Croda International, British American Tobacco, Rio Tinto, Experian, The Sage Group, Relx and Hiscox gained 1%-2.7%.

JD Sports Fashion fell 14.3% after reporting lower sales and cutting earnings outlook. The sportswear retailer said that its like-for-like sales decreased for the second quarter compared to the same period last year. Further the company cut its adjusted profit outlook for the second half of the year.

Quarterly total sales was £3.08 million, a decrease of 1.3% in organic sales and 3.1% in like-for-like sales.

Looking to the second half of the year, the company now expects profit before tax and adjusting items of £700 million to £800 million compared with the previous guidance of £750 million to £850 million.

Investec dropped 4.6%. Legal & General ended nearly 4% down. Burberry Group, Convatec, Marks & Spencer, Barratt Redrow, IAG, Compass Group and Sainsbury (J) ost 2%-4%.

Kingfisher, Coca-Cola HBC, Persimmon, Polar Capital Technology Trust, Melrose Industries, Barclays, M&G, Entain and Rolls-Royce Holdings also ended notably lower.

Shares of recruiter Hays declined sharply after the company reported a full-year pre-tax loss due to restructuring charges and cutting its annual dividend.

In the German market, Qiagen gained more than 3%. Symrise climbed nearly 2%. Heidelberg Materials, Continental, E.ON, Beiersdorf and Infineon also closed notably higher.

Adidas closed lower by more than 3%. MTU Aero Engines, Rheinmetall, Deutsche Telekom, Scout24, Brenntag, Siemens Energy, Deutsche Bank and Fresenius shed 0.9%-2%.

In the French market, Eurofins Scientific jumped more than 3%. Michelin, Pernod Ricard, L’Oréal, TotalEnergies, Engie, Danone and Veolia Environment closed higher by 0.7%-1.1%.

Stellantis, Kering, LVMH, Hermes International, Renault, ArcelorMittal, STMicroelectronics, Safran, Airbus, Thales, EssilorLuxottica, Teleperformance, AXA and Sanofi lost 1%-4%.

In economic news, data released by Destatis showed Germany’s producer price inflation hit the highest in more than three years in July, rising 3% annually in the month, faster than the 1.8% rise in June.

This was the highest rate since April 2023 when prices advanced 5.2%. Economists had forecast prices to rise 2.7% in July.

On a monthly basis, producer prices climbed by sharper-than-expected 1.1% and in contrast to the 0.3% fall in June. Economists had forecast prices to grow 0.5% in July.

Higher prices for intermediate goods and energy drove the annual increase. Intermediate goods prices rose 5.4% and energy prices were up 3.8%.

Prices of capital and durable consumer goods gained 2.3% and 2%, respectively. Meanwhile, non-durable consumer goods dropped 2.3%.

The Confederation of British Industry’s monthly industrial order-book balance improved sharply to -25 in August from -45 in July, marking the strongest monthly increase in more than five years and above expectations of -40.