Europe Stocks Edge Lower Amid US-Iran Tensions and Rising Oil Prices
European stocks edged lower on Monday as tensions between the US and Iran pushed oil prices higher. The pan-European STOXX 600 index dropped 0.1% to 655.54 points by 0712 GMT, with trading volumes likely subdued due to a bank holiday in London.
The Germany's DAX fell 0.7%, the most among regional indexes, ahead of inflation data from the euro zone's largest economy that could offer clues on the European Central Bank's rate path. Investors have largely locked in expectations of a September ECB rate increase.
Chris Weston, head of research at Pepperstone Group, noted that 'with European inflation dynamics coming through this week, that probability may be massaged around the edges.' He added that 'we turn the page on month-end and head into a data-dependent, central bank-focused September.'
Energy stocks firmed up, tracking a more than 2% jump in Brent crude to $90.70 a barrel. TotalEnergies rose 3.8%, Orlen gained 2.4%, and OMV increased by 1.8%. The rise in energy prices has reinforced inflation concerns at a time when investors are already bracing for further policy tightening.
Finance leaders from the G20 gather in North Carolina on Monday and Tuesday as elevated energy and commodity prices linked to the Iran war weigh on global growth prospects.