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European shares fall more than 1% as hopes of quick end to Middle East conflict fade
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European shares fall more than 1% as hopes of quick end to Middle East conflict fade
Apr 2, 2026 12:52 AM

April 2 (Reuters) - Europe's main stock index fell more

than 1% on Thursday as hopes of a quick end to the Middle East

conflict faded after U.S. President Donald Trump vowed more

strikes on Iran.

The pan-European STOXX 600 index dropped 1.2% to

589.99 points by 0725 GMT. The index is on track for a weekly

rise.

Technology stocks slid nearly 3% and led sectors

lower, while miners fell 2.7%, tracking lower precious

metal prices.

Market sentiment weakened after Trump said "we're going to

hit them extremely hard over the next two to three weeks. We're

going to bring them back to the Stone Ages where they belong."

Brent crude whizzed past $100 a barrel, up nearly 7%

with energy stocks up 1.2%, making them the only major sector

trading higher.

Rising oil prices pressured airline stocks such as Air

France and Lufthansa, which fell more than

3.7% each.

The STOXX 600 jumped more than 2% on Wednesday after Trump

said that Washington would wind up its hostilities with Iran

imminently, reflecting the volatility investors have had to

navigate for more than a month.

A delay in reopening the Strait of Hormuz, a strategic

waterway for major European imports, will continue to pressure

equities and reinforce heightened inflation and growth fears.

Interest rate futures are pricing in at least three interest

rate hikes of 25 basis points each by the end of this year,

according to LSEG-compiled data. Markets had been pricing in no

change to monetary policy by the European Central Bank before

the war.

Markets will be closed for Good Friday and Easter Monday.

(Reporting by Avinash P and Johann M Cherian in Bengaluru;

Editing by Nivedita Bhattacharjee and Mrigank Dhaniwala)

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