European equities fell to a one-month low on Wednesday as a global bond selloff
and renewed Middle East tensions lifted energy prices and raised inflation
concerns. The STOXX Europe 600 was down about 0.3% intraday, with most sectors
lower and retail the weakest, off 1.5%. Brent briefly topped $95/bbl. The US and
Iran exchanged strikes overnight in the sharpest escalation in weeks. Europe’s
heavy reliance on energy imports leaves it particularly exposed if the conflict
persists. A stronger-than-expected earnings season provided some relief and
helped limit losses in the STOXX Europe 50. UBS Global Wealth Management CIO
Mark Haefele said: "Despite near-term pressure from energy prices, bond yields
and the possibility of further ECB tightening, we continue to find European
equities attractive. Improving activity, stronger corporate earnings and
reasonable valuations support further upside."
