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)