Europe: Shares slide as Middle East tensions flare

Published Sat, May 9, 2026 · 11:15 AM

[BENGALURU] European shares slipped on Friday (May 8) in broad-based losses as a flare-up in the Middle East conflict hit risk sentiment at the end of a week dominated by geopolitics.

The pan-European Stoxx 600 closed down 0.7 per cent at 612.14 points, though it posted a second straight weekly gain, albeit small. Major regional markets followed suit, with Germany’s DAX falling 1.3 per cent to lead declines.

Washington said it expected an Iranian response as soon as Friday to its latest proposal to end the Gulf conflict, even as US and Iranian forces clashed and the United Arab Emirates came under renewed attack.

“Investors somehow understand that the process of getting to a peace agreement will not be nice, clean, and linear and that there will be setbacks and disagreements along the way,” said Richard Flax, chief investment officer at Moneyfarm.

European stocks have remained sensitive to geopolitical headlines, with the region’s energy dependence fuelling concerns about inflation and growth.

Also weighing on sentiment was US President Donald Trump’s warning that the European Union would face “much higher” tariffs if trade commitments were not met by Jul 4.

Most Stoxx sub-sectors declined, with financials and industrials the biggest drags, down 0.7 per cent and 1.5 per cent, respectively. REUTERS