European Markets Fall Again As War Concerns, Rate Hike Fears Weigh

(RTTNews) - After a fairly good start Friday morning, the major European markets turned weak and ended the day's session with notable losses as oil's climb and concerns that major central banks will soon hike interest rates rendered the mood bearish.

Major central banks, including the Federal Reserve, the European Central Bank and the Bank of England, left their interest rates unchanged but hinted at one or more rate hikes this year to combat inflation.

Oil's wild swings since trade commenced this morning resulted in high volatility in the stock markets across Europe.

Oil prices fell earlier in the day after Israeli Prime Minister Benjamin Netanyahu said U.S. President Donald Trump had requested that there be no further attacks on the Iranian gas field.

Trump suggested that he has no plans to deploy American troops to the Middle East. To increase oil supply and bring down energy prices, U.S. officials said Washington may soon lift sanctions on Iranian oil stranded in tankers.

However, oil pared early losses and moved higher on reports the U.S. President is mulling a forced takeover of Iran's Kharg Island.

The pan European Stoxx 600 ended down 1.78%. The U.K.'s FTSE 100 slid 1.44%, Germany's DAX fell 2.01% and France's CAC 40 lost 1.82%. Switzerland's SMI closed with a loss of 1.11%. The FTSE, DAX and CAC 40 all fell for a third straight week.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Türkiye closed with sharp to moderate losses.

Russia bucked the trend and closed with a moderate gain.

In the UK market, Smiths Group tanked nearly 10% after the engineering group's half-year revenue growth fell short of estimates.

Babcock International ended 4.5% down. Coca-Cola Europacific Partners, BP, ICG, National Grid, SSE, Weir Group, Segro, Barratt Redrow, Centrica, Natwest Group, Marks & Spencer, BAE Systems, BT Group, Rolls-Royce Holdings, Coca-Cola HBC

Antofagasta, Anglo American Plc and Endeavour Mining declined sharply. Bank stocks HSBC Holdings, Natwest Group, Lloyds Banking Group and Barclays also ended sharply lower.

British pub chain JD Wetherspoon tumbled after reporting a notable drop in profits in the first half.

Metlen Energy & Metals climbed 3.2%. Croda International, Entain, Easyjet, IAG and Burberry Group gained 1%-1.5%.

In the German market, SAP ended down by about 4.2%. E.ON, Zalando, MTU Aero Engines, Rheinmetall, Siemens, Gea Group, Merck, Siemens Energy, RWE and Fresenius lost 2%-4%.

Deutsche Bank, Qiagen, Fresenius Medical, Daimler Truck Holding, Munich RE, Hannover RE, Scout24, Deutsche Boerse, Siemens Healthineers and Allianz also ended notably lower.

Heidelberg Materials gained about 3.3%. Brenntag climbed 1%.

In the French market, Hermes International, Societe Generale, Safran, Thales, BNP Paribas, Capgemini, Dassault Systemes, Legrand, Engie, EssilorLuxottica and TotalEnergies lost 2%-5%.

Airbus, Vinci, Schneider Electric, ArcelorMittal, STMicroelectronics and AXA also declined sharply.

In economic news, Germany's producer prices declined more than expected in February largely due to the sharp fall in energy prices, data from Destatis showed.

Producer prices logged an annual fall of 3.3% in February, slower than the 3% decrease seen in January. On a monthly basis, producer prices dropped 0.5%, confounding expectations for an increase of 0.3%.

The euro area current account surplus increased in January to the highest level since June 2024, data from the European Central Bank showed.

The current account surplus rose to EUR 38 billion from EUR 13 billion in December.

The surplus on trade in goods increased to EUR 33 billion from EUR 19 billion and that on services rose to EUR 16 billion from EUR 14 billion.

Primary income showed a surplus of EUR 4 billion compared to a shortfall of EUR 4 billion in the previous month. The shortfall in the secondary income remained unchanged at EUR 15 billion.

During twelve months to January, the current account surplus declined to EUR 261 billion, or 1.6 percent of euro area GDP, from EUR 377 billion or 2.5 percent a year earlier.

The UK budget deficit reached the second highest level on record for the month of February, the Office for National Statistics reported Friday.

Public sector net borrowing rose by GBP 2.2 billion to GBP 14.3 billion in February, surpassing the expected level of GBP 8.7 billion.

In the financial year to February, borrowing decreased GBP 11.9 billion from the last year to GBP 125.9 billion, lower than the Office for Budget Responsibility's projection of GBP 127.8 billion for the period.