European Stocks Held, Investors Monitor Iran and Energy Supply Risks
European stocks started the week with limited movement, with the STOXX 50 and STOXX 600 moving flat as investors remained cautious amidst lingering tensions over Iran. Sentiment was further weighed down by US President Donald Trump's statement raising the possibility of seizing Iran's oil resources, including Kharg Island, a key export hub.
Amid these geopolitical risks, oil prices continued their rally and hit their highest level since 2022, keeping energy inflation concerns alive and curbing risk appetite in equities. This has made the market more selective, especially as expensive energy could squeeze corporate margins and complicate central banks' interest rate paths if inflation rises again.
Sectoral movements were mixed. Industrial stocks lagged, while utilities and energy outperformed the market. Several major issuers moved lower, including HSBC (-1%), Hermès (-0.7%), Siemens (-0.5%), and Schneider Electric (-0.8%).
On the other hand, the oil rally supported energy stocks. Shell rose around 1% and TotalEnergies gained 1.1%, reflecting a shift into sectors that benefit from high energy prices and increased supply risks.
Market participants should monitor:
developments in the Iran conflict and the security of energy supply lines,
the direction of oil (whether it remains high or begins to correct),
yield reactions and interest rate expectations if energy inflation returns to dominance,
sector rotation: will defensive/energy continue to lead while industrials are held back?
Source: Newsmaker.id
