Finance
European shares fall again as middle east war drags on
Published by Global Banking & Finance Review®
Posted on March 3, 2026
2 min readLast updated: March 3, 2026
Quick Summary
European stocks slipped again on March 3 amid lingering Middle East conflict, surging oil prices due to the effective closure of the Strait of Hormuz, and renewed warnings of inflation and slower euro‑zone growth.
European Shares Extend Losses as Middle East Conflict Drives Oil Surge
Market Reactions to Middle East Tensions and Oil Price Surge
March 3 (Reuters) - European shares extended their decline on Tuesday as the global equity selloff deepened, as investors grappled with the prospect of a drawn-out Middle East war, and a sharp jump in oil prices led to fears of a rise in the cost of living.
Stock Market Performance
The pan-European STOXX 600 was down 1.3% at 615.72 points by 0804 GMT, after closing at the lowest level in more than two weeks on Monday.
Sector Movements
The utilities index and banks led sectors lower with 2.6% declines each, while energy climbed marginally, adding to the previous session's gains.
Geopolitical Developments
U.S. President Donald Trump sought to justify a broad, open-ended war on Iran, saying the stated aims of the conflict had shifted.
Impact on Oil and Shipping
An official from Iran's Revolutionary Guards said the Strait of Hormuz is closed and any vessel trying to pass would be targeted, pushing up global oil and gas shipping rates.
European Central Bank Response
European Central Bank Chief Economist Philip Lane told the Financial Times a long war could massively put upward pressure on inflation and reduce growth rate in the euro zone.
Company Highlights
Thales Earnings Report
Among individual stocks, Thales gained 0.7% after the French aerospace and technology firm reported a slightly higher-than-expected annual core profit.
Reporting Credits
(Reporting by Avinash P and Pranav Kashyap in Bengaluru; Editing by Mrigank Dhaniwala)
Key Takeaways
- •Pan‑European STOXX 600 dropped ~1.3% to ~615.7, led lower by utilities and banks, while energy edged higher on oil price spikes.
- •IRGC’s effective closure of the Strait of Hormuz and attacks on shipping sharply disrupted maritime traffic, provoking a surge in tanker rates and war‑risk insurance premiums.
- •ECB’s Philip Lane warned of prolonged conflict fueling inflation and weighing on euro‑zone growth prospects.
Frequently Asked Questions about European shares fall again as Middle East war drags on
1Why are European shares falling?
European shares are falling due to concerns about a prolonged Middle East war and rising oil prices, which have led to a broader global equity selloff.
2How has the STOXX 600 performed recently?
The STOXX 600 index dropped 1.3% and reached its lowest level in over two weeks, reflecting growing market uncertainty.
3Which sectors were most affected by the selloff?
The utilities and banking sectors led declines, both falling 2.6%, while the energy sector saw marginal gains.
4How is the Middle East conflict impacting oil prices?
The conflict has led to the closure of the Strait of Hormuz, raising global oil and gas shipping rates and pushing oil prices higher.
5What is the potential economic impact on Europe?
The ongoing war could push inflation higher and slow economic growth in the euro zone, according to the European Central Bank's Chief Economist.
