European shares fell sharply on Friday as Israel launched attacks on Iran, sparking global market caution and driving investors toward safer assets.
The pan-European STOXX 600 index dropped 1.2% to 543.54 points early in the session, heading for a fifth consecutive day of losses and a weekly decline.
Israel targeted Iranian nuclear facilities and ballistic missile factories in an effort to halt Tehran’s nuclear ambitions. In response, Iran launched around 100 drones, escalating tensions in the Middle East. This conflict added to existing market worries over U.S. tariff policies.
The surge in oil prices, rising over 7%, hit airline stocks hardest. The travel and leisure sector fell 3.1%, with British Airways owner ICAG down 4.8%, Lufthansa dropping 4.6%, and EasyJet losing 4.3%. Carnival, the cruise operator, saw its London-listed shares fall 5%.
In contrast, energy stocks gained, with Shell and BP each rising 1.9%. Defense companies also benefited from the heightened tensions; France’s Dassault Aviation increased 1.3%, and Italy’s Leonardo rose 2.3%.
The market reaction reflects concerns about the impact of Middle East instability on global growth and supply chains, especially in oil. Investors are seeking refuge in safer assets amid the uncertainty caused by the conflict and ongoing trade tensions.
Read more:
S&P 500 Rises as Oracle Boosts AI Hopes; Boeing Shares Fall
Tesla Surges Past $1 Trillion Market Value Amid Robotaxi Rollout Plans
