European Shares Slide as Inflation and Middle East Tensions Unsettle Markets
Market Overview and Key Developments
Investor Sentiment and Market Performance
May 20 (Reuters) - European shares edged lower on Wednesday as investors remained cautious with war-driven inflation fears pressurising bonds, while markets kept a close watch on U.S.-Iran negotiations.
The pan-European STOXX 600 dipped 0.2% to 610.37 points, as of 0701 GMT. Other regional bourses were also lower with Germany's DAX and France's CAC 40 down 0.2% each.
Geopolitical Factors Impacting Markets
President Donald Trump said on Tuesday the war would be over "very quickly", while Vice President JD Vance talked up progress in talks with Tehran about an agreement to end hostilities.
Commodities and Monetary Policy Outlook
Brent crude was at about $110 a barrel, while bonds remained under pressure as money markets anticipate at least two rate hikes from the European Central Bank before the end of the year.
Trade Agreements and Tariff Developments
Meanwhile, the European Union stuck a provisional agreement to remove import duties on U.S. goods, as part of a trade deal with Washington last July, and before Trump's deadline of July 4 when he threatened to hike tariffs if the deal was not implemented.
Company Highlights
Euronext Earnings
In early trade, Euronext advanced 4.3% after reporting first-quarter earnings above market expectations.
Marks & Spencer Forecast
Marks & Spencer rose 5% after forecasting profit growth for the next year after annual profit slid due to a cyber hack disruption.
(Reporting by Twesha Dikshit; Editing by Eileen Soreng)
