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LONDON — European stocks slumped on Thursday as the Iran war escalated further following attacks on Iranian and Qatari energy infrastructure.
The pan-European Stoxx 600 was down 2.1% as of 12:10 p.m. in London (8:10 a.m. ET), with all major bourses in negative territory and all sectors except for oil and gas trading lower.
Miners led losses, with the Stoxx Europe Basic Resources sector last seen trading down 4.5%. This followed a sharp sell-off in the spot price of gold and silver, which fell 2.8% and 5.3% respectively.
FTSE 100-listed mining giants Antofagasta and Fresnillo were down 6.6% and 7.4%, respectively, as heightened inflation fears and rising energy prices affect producers’ margins.
All other sectors were in the red during early trade, including banks and travel stocks.
Norwegian oil giant Equinor bucked the wider trend, rising 7.4% in morning trade after reporting its annual earnings. The company generated $27.6 billion of operating income, with increases in equity production of liquids and gas, and renewable power. Equinor said Wednesday it had discovered a large oil field near the Arctic Circle, estimated to yield between 14 and 24 million barrels.
A significant escalation in the conflict came Wednesday when Israel launched strikes on Iran’s South Pars gas field, prompting Tehran to launch retaliatory missile attacks on Qatar’s Ras Laffan liquefied natural gas terminal.
U.S. President Donald Trump warned on Wednesday that if Iran continued targeting Qatar’s energy facilities, America would “massively blow up the entirety of the South Pars Gas Field.” Oil prices jumped once again overnight following the strikes and comments.
European market attention is also turning to central bank action in the region today. The Bank of England held interest rates steady 3.75% in a unanimous decision by its nine-member monetary policy committee. Sweden’s Riksbank held its key rate at 1.75%, while the Swiss National Bank held at 0.0%, as policymakers monitor the Iran conflict and assess its impact on the growth and inflationary outlook in the region.
Yields on 10-year gilts, the benchmark for U.K. government borrowing, extended earlier gains to add 13 basis points immediately after the BoE decision, reaching 4.875%.
Government bond yields are also trending higher across Europe ahead of the European Central Bank’s latest rates decision due later today.
U.S. stock futures inched lower overnight after the Dow Jones Industrial Average dropped to a fresh 2026 low.
The decline came after a surprisingly hot producer prices report, and greater inflation expectations from the Federal Reserve, which have added to fears that the war in Iran could mean the U.S. economy is headed for a stagflation scenario — or a period of lower growth and higher pricing pressures. Asia-Pacific markets dipped on Thursday, tracking losses on Wall Street.
Earnings come from Enel, Equinor, BASF, Argenx and Vonovia.
— CNBC’s Sarah Min contributed to this market report.