STOXX 600 heads for third weekly loss on inflation fears
The STOXX 600 rose 0.8% Friday but faces its third weekly loss. Middle East tensions and high oil prices have increased expectations for future ECB rate hikes.
European equity markets edged higher on Friday, yet the broader STOXX 600 index remained on course for its third straight weekly loss. Persistent geopolitical tensions in the Middle East and volatile energy markets continue to fuel inflation anxieties, increasing the likelihood of further monetary tightening. The pan-European STOXX 600 climbed 0.8% to reach 588.37 points by mid-morning. Gains were primarily supported by the financial sector, while energy shares retreated 0.7% alongside a pullback in crude prices. For the week, the benchmark has declined 1.1%, representing its most prolonged period of weekly losses in nearly a year. Regional stability remains a primary concern for investors after Israel launched new military operations against Iran. This escalation occurred despite cautionary statements from the United States regarding the targeting of energy infrastructure. The European Central Bank opted to keep interest rates steady during its Thursday session. However, policymakers have signaled that the inflationary impact of the conflict may necessitate rate increases in the coming months. In corporate news, Unilever PLC shares rose 1.2% following reports that the consumer goods giant is in negotiations with McCormick & Company, Incorporated regarding the divestment of its foods business.
