Key insights
- European stocks dipped due to geopolitical tensions between the US and Iran, and escalating conflict in the Middle East. While EasyJet shares surged on takeover speculation, the broader market sentiment was negative. A significant investment by SoftBank in French AI infrastructure provided a boost to Europe's tech sector, but this was overshadowed by rising oil prices and concerns over regional stability, which could indirectly impact global markets through energy costs and risk aversion.
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European stocks dipped on Monday as investors assess the latest violations of an increasingly fragile ceasefire between the U.S. and Iran, and a potential acquisition bid for Britain’s EasyJet.
The pan-European Stoxx 600 was 0.1% lower shortly after 10:15 a.m. in London, with most sectors beginning the new trading week in negative territory. London’s FTSE 100 opened 0.2% lower, while France’s Cac 40 was flat. Germany’s Dax, on the other hand, gained 0.1%.
Europe’s tech index bucked the wider negative trend, rising 0.9% in early trade after Japan’s SoftBank Group pledged to invest 45 billion euros ($53 billion) in France over the next five years to build artificial intelligence infrastructure. The investment is part of broader Softbank plans worth 75 billion euro in commitments to France.
On Monday morning, the Stoxx Europe tech index touched levels not seen since September 2020.
Budget carrier EasyJet on Monday responded to speculation of a looming takeover offer from U.S. investment firm Castlelake, saying it had not received any such approach but would consider any proposal should one be made.
EasyJet shares were last seen 9.7% higher. The group, which said the timing of Castlelake’s potential offer is “highly opportunistic”, has seen its stock price slump more than 40% over the last five years.
But the broader downward trend seen across European equities came after Israel ordered troops to push deeper into Lebanon on Sunday, and the U.S. and Iran traded strikes overnight.
Oil prices rose over 2% Monday following the escalations, as foreign ministers in the U.K. and Germany joined France in condemnation of Israel’s renewed aggression into Lebanon.
“Israel’s military escalation in Lebanon has killed and displaced civilians, destroyed infrastructure, and eroded space for diplomacy,” U.K. foreign secretary Yvette Cooper wrote on X on Sunday, adding “it must end.”
Meanwhile, Israeli Prime Minister Benjamin Netanyahu said on Sunday that he instructed the IDF to “expand the maneuver” in Lebanon, despite the ceasefire declared in April.
U.S. President Donald Trump wrote in a Truth Social post Monday morning that Iran “really wants to make a deal,” as he lashed out at “Dumocrats, and various seemingly unpatriotic Republicans” for “negatively ‘chirping,’ at levels never seen before.”
“Just sit back and relax, it will all work out well in the end - It always does!” he added.
South Korean stocks continued their tech-fueled rally unabated, bucking mixed performance in wider Asia-Pacific stock markets to hit fresh highs overnight.
South Korea’s Kospi jumped 1.31% as shares in Samsung Electronics rose more than 3% to hit an all-time high.
There are no major earnings announcements scheduled in Europe on Monday. Key data releases include PMI manufacturing figures for the U.K., U.S., Germany and the European Union.