European Shares Retreat On Rate-hike Jitters

(RTTNews) - European stocks declined on Thursday as uncertainty lingered on the status of Middle East peace talks.

Iran dismissed an American plan to pause the war, insisting that it will only occur on Tehran's own terms and timeline.

Investors were also reacting to hawkish comments by European Central Bank (ECB) member and Bundesbank President Joachim Nagel.

Nagel said that the European Central Bank may hike interest rates at its next meeting in April "if the war in the Middle East raises the spectre of an inflation surge in the Eurozone".

ECB President Christine Lagarde said Wednesday that anything more than a short-lived spike in inflation could warrant an increase in interest rates.

In economic releases, a survey showed that German consumer sentiment is set to deteriorate in April due to economic concerns over the war in Iran.

The forward-looking consumer sentiment index fell to -28.0 in April from -24.8 in the previous month, according to survey results published jointly by NIQ/GfK and the Nuremberg Institute for Market Decisions. The score was forecast to fall moderately to -27.3.

Although no significant effects were visible in terms of the willingness to buy or save in March, income expectations dampened notably because of inflation fears.

The pan European Stoxx 600 fell 0.9 percent to 582.35 after climbing 1.4 percent on Wednesday.

The German DAX tumbled 1.2 percent, France's CAC 40 shed 0.6 percent and the U.K.'s FTSE 100 was down 0.8 percent.

Banks traded lower, with Commerzbank, Deutsche Bank, BNP Paribas and Barclays falling 1-2 percent. Henkel shares edged up slightly. Hair care brand ?Olaplex Holdings said ?it entered into a definitive agreement to be acquired ?by ?the German consumer goods maker.

Food delivery giant Delivery Hero fell 1.1 percent after issuing a cautious outlook. French firm Vinci was moving lower after it agreed to buy a toll highway portfolio in India from Macquarie Asia Infrastructure Fund 2.

Swedish fashion retailer H & M Hennes & Mauritz slumped 5.6 percent after Q1 sales fell short of expectations.

Energy giant BP Plc rose 1.2 percent and peer Shell added 0.8 percent as crude oil prices rose about 2 percent, clawing back losses from the previous session on concerns that a prolonged conflict in the Middle East will further disrupt supplies.

U.K. retail bellwether Next Plc surged 6 percent after lifting its profit guidance for 2026.