European shares fall as 'Israel's' war on Iran drags into fifth day
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European shares slid Tuesday, pushing investors toward safe-haven assets as market uncertainty rises.
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Firefighters work to extinguish a blaze after a missile launched from Iran struck Tel Aviv, occupied Palestine, Monday, June 16, 2025 (AP)
European shares opened lower on Tuesday as the ongoing Israeli war on Iran entered its fifth consecutive day, deepening investor anxiety and prompting a shift toward safer assets. The mounting instability in the Middle East has added a new layer of volatility to already sensitive global markets.
By 0710 GMT, the pan-European STOXX 600 index had dropped 0.8% to 542.38 points, reversing Monday’s brief rebound that followed five straight sessions of losses.
The conflict has stirred global commodity markets, particularly oil. Crude prices initially ticked higher following the heightened tensions but later pulled back. Despite the overall decline across European equities, energy shares edged up by 0.3%, outperforming the broader index as investors braced for potential supply disruptions.
Gas prices increase
European natural gas prices moved higher as traders braced for a potential escalation in the war and risks for global energy supplies.
Benchmark futures rose as much as 1.8% following choppy trading in the previous session, Bloomberg reported.
While Europe currently has adequate gas supplies, its strong dependence on global liquefied natural gas (LNG) markets leaves it vulnerable to price volatility whenever geopolitical tensions disrupt international energy trade. The continent will also need to secure additional LNG in the coming months to rebuild its reserves, which fell to their lowest level in three years this past winter.
Dutch front-month futures, Europe’s gas benchmark, rose 0.6%% to €38.12 a megawatt-hour by 8:52 a.m. in Amsterdam.
The markets were rattled after US President Donald Trump called for Iranian civilians to evacuate Tehran, citing the country’s alleged rejection of a proposed nuclear deal.
Earlier today, Trump's early exit from the Group of Seven (G7) summit in Canada fueled speculation of deepening involvement in the conflict, though he later claimed the move had “nothing to do” with ceasefire negotiations.
Telecom stocks lead losses, Trump exit adds to market jitters
Almost all sectors traded in the red, with telecom stocks leading the declines, falling by 1.4%. Uncertainty stemming from the war on Iran, coupled with limited diplomatic clarity from the United States and the G7, weighed heavily on sentiment across European exchanges.
Among individual stocks, London’s Ashtead was one of the top percentage gainers despite forecasting a slowdown in rental revenue growth, benefiting from its diversified exposure and resilience in infrastructure leasing.
As the Israeli-provoked war on Iran persists with no signs of de-escalation, market watchers expect further risk aversion in global equities and growing pressure on central banks to factor geopolitical disruptions into their outlooks.
🎙️ What does rising tension between Israel and Iran mean for oil prices and shipping?
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