European Stocks Backed Down In Muted Reaction After Middle East Tensions Flared Up

Bridgette Randall
23 Jun, 2025
London

European markets traded down on Monday despite the escalating tensions in the Middle East. 

Benchmark indexes in Frankfurt, Paris, Milan, and London edged lower, and the market's reaction was muted as traders awaited Iran's reaction. 

Over the weekend, the U.S. carried out multiple aerial attacks on Iran's nuclear infrastructure, directly involving itself in Israel's war on Iran. 

The direct involvement of the U.S. raised the stakes of a wider war in the region and increased risks of disruptions of global energy supply. 

Moreover, Iran threatened to close crude oil supply through the Strait of Hormuz. 

The added tensions in the Middle East stoked fears across the Eurozone, as Russia's war in Ukraine shows no sign of abating. 

Meanwhile, over the weekend, Russia stepped up its bombing campaign, targeting multiple cities in Ukraine, including Kiev.

 

Europe Indexes and Yields

The DAX index decreased by 0.6% to 23,203.74, the CAC-40 index edged lower 0.7% to 7,537.22, and the FTSE 100 index declined 0.2% to 8,757.26.

The yield on 10-year German bonds inched higher to 2.55%, French bonds increased to 3.29%, UK gilts moved up to 4.57%, and Italian bonds edged higher to 3.57%.

The euro decreased to $1.15; the British pound was lower at $1.34; and the U.S. dollar was lower and traded at 81.70 Swiss cents.

Brent crude increased $0.19 to $77.46 a barrel, and the Dutch TTF natural gas was higher by €0.69 to €41.63 per MWh.

 

Europe Movers 

Defense stocks advanced on Monday and extended a three-month rally amid heightened geopolitical tensions. 

Thales SA edged up 0.1% to €249.80, Dassault Aviation SA edged up 0.8% to €307.40, Rheinmetall AG decreased 1.5% to €1,730.50, Safran SA edged up 0.3% to €261.0, and MTU Aero Engines AG decreased 0.2% to €372.40. 

Energy complex stocks extended 7-day gains after Brent crude soared as much as 7% before easing the intraday gain to 2%. 

Shell PLC increased 0.5% to 2,690.0 pence, BP PLC advanced 0.6% to 387.10 pence, and TotalEnergies SE rose 0.4% to €54.88.