European Stocks Slide Amid Rising Oil Prices and ECB Rate Hike Expectations
European stock markets declined on Monday as rising oil prices following fresh U.S.-Iran attacks fueled inflation concerns and reinforced expectations of an interest rate hike by the European Central Bank this week.
The pan-European STOXX 600 index fell 0.1% to 649.17 points, while the Swiss main index dropped 1.2%. Novartis shares plummeted 3.3% after its experimental drug pelacarsen failed to meet a key goal in a late-stage trial.
The German DAX was flat, following other regional bourses. Energy stocks, however, advanced 1.2%, mirroring higher oil prices, with Brent crude futures rising over $1 per barrel due to the escalating tensions between the U.S. and Iran in the Strait of Hormuz and other areas.
The ECB's decision to raise interest rates by 25 basis points on Thursday is widely expected, as higher oil prices have strengthened the case for further policy tightening. Investors will also monitor second-quarter euro zone economic data due later in the day.