European Stocks Close Weak As Middle East War Rattles Sentiment

(RTTNews) - European stocks tumbled on Thursday as concerns about the potential impact of the ongoing Middle East War on global economic growth, and fears of elevated inflation levels rendered the mood bearish.

Oil's upmove after the United States submarine sank an Iranian warship off the southern coast of Sri Lanka, has raised inflation concerns.

Travel-related stocks had a tough outing due to airspace closures in the Middle East region forcing carriers to cancel tens of thousands of flights over the past one week.

The pan European Stoxx 600 ended down 1.37%. The U.K.'s FTSE 100 settled lower by 1.45%, Germany's DAX closed 1.78% down, and France's CAC 40 lost 1.49%. Switzerland's SMI drifted down 1.57%.

Among other markets in Europe, Austria, Belgium, Finland, Ireland, Netherlands, Norway, Poland, Spain and Sweden ended weak.

Czech Republic, Denmark, Greece, Iceland and Türkiye closed higher, while Portugal and Russia ended flat.

In the UK market, Rentokil Initial soared nearly 11% after reporting higher annual profits. Admiral Group is surging 4% as it posted record profits despite a challenging economic backdrop.

Admiral Group surged 7.8% as it posted record profits despite a challenging economic backdrop.

Reckitt Benckiser shed nearly 6% after maintaining its revenue growth targets for this fiscal year. Aviva ended lower by about 3.2% despite meeting 2025 profit targets.

3i Group ended more than 8% down. Fresnillo, Endeavour Mining, Rio Tinto, Rolls-Royce Holdings, Metlen Energy & Metals, BAE Systems, Easyjet, IAG, Antofagasta, Anglo American Plc, Segro, Barclays and Standard Chartered also declined sharply.

Compass Group, Relx, Experian, Bunzl, BP, Convatec Group, Weir Group, JD Sports Fashion, Diageo, Shell and Mondi posted strong gains.

In the German market, Merck shed more than 7%, weighed down by disappointing earnings guidance. Deutsche Post closed lower by about 5% after reporting lower FY25 attributable net profit.

Siemens Energy and Rheinmetall closed down by about 6% and 5.9%, respectively. Siemens, Infineon, Fresenius, Deutsche Bank, Siemens Healthineers, Gea Group, Henkel, Commerzbank, Beiersdorf, MTU Aero Engines and Daimler Truck Holding shed 2%-4%.

Zalando, Adidas, Symrise, SAP, Fresenius Medical Care and Scout24 ended notably higher.

In the French market, ArcelorMittal, Thales, Safran, Legrand, Credit Agricole, Societe Generale, Stellantis, BNP Paribas, Schneider Electric, Engie, Saint-Gobain and Sanofi declined sharply.

Teleperformance, STMicroelectronics, Dassault Systemes, Publicis Groupe, Capgemini and Pernod Ricard posted impressive gains.

In economic news, data from S&P Global showed the HCOB Germany Construction PMI fell to 43.7 in February 2026 from 44.7 in January, signaling a further contraction at the start of the year.

Construction PMI In the Euro Area increased to 46 points in February from 45.30 points in January of 2026, data from S&P Global showed.

Data from the statistical office INSEE showed France's industrial production rebounded in January driven by the robust recovery in transport equipment output.

Industrial production expanded 0.5% on a monthly basis, offsetting December's 0.5% decrease. Output was expected to grow 0.4%.

Similarly, manufacturing output grew 0.6% month-on-month, reversing a 0.7% fall in December.

Data from Eurostat showed Eurozone retail sales fell 0.1% month-on-month in January 2026, following an upwardly revised 0.2% gain in December 2025 and missing market expectations of a 0.3% rise.

On an annual basis, Eurozone retail growth accelerated to 2.0% in January from 1.8% in December, surpassing the market consensus of a 1.7% increase.

Data from S&P Global showed the S&P Global UK Construction PMI fell to 44.5 in February of 2026 from 46.4 in the previous month, contrasting with expectations that it would improve slightly to 47 to reflect a deeper contraction in the British construction activity.

UK new car sales rose 7.2% year-on-year to 90,100 units in February 2026, marking the highest February volume in 22 years, according to the Society of Motor Manufacturers and Traders (SMMT). The surge was largely driven by private retail registrations, which climbed 17.6% to 35,227 units.