Europe close: Stocks turn lower as investors watch oil markets

8th Jun 2026 15:56

(Sharecast News) - European shares closed subdued on Monday as renewed missile exchanges between Iran and Israel, concerns about higher interest rates and doubts over the sustainability of the artificial intelligence rally weighed on sentiment.

The pan-European Stoxx 600 slipped 0.06% to 622.31.

Germany's DAX fell 0.47% to 24,641.85 and France's CAC 40 declined 0.23% to 8,199.29, while London's FTSE 100 edged up 0.05% to 10,373.20.

In commodities, Brent crude futures were last up 1.71% on ICE at $94.68 per barrel, while the NYMEX quote for West Texas Intermediate gained 1.35% to $91.76.

Chris Beauchamp, chief market analyst at IG, said: "Markets find themselves right back where they were a few days ago, as stocks rebound from Friday's wave of selling and the brief Israel-Iran clash subsides into quiet once again.

"The rally in stocks continues to impress in its resilience, particularly of course in those indices that have been such standout winners of late, namely the Nasdaq 100 and the Nikkei 225, both of which seem poised to shrug off the recent slump and carry on right where they left off."

Oil prices came off earlier highs after Iran said its military operations against Israel had ended.

Brent had surged as much as 4% earlier in the session after Israel and Iran breached a fragile ceasefire and exchanged fire through the weekend and into Monday.

Israel struck the Iran-aligned Hezbollah military group in Beirut, prompting Tehran to fire missiles at northern Israel, before Israel retaliated by attacking a petrochemical plant and other military targets in Iran.

Iran's joint military command said operations against Israel had ended, but warned of "much more severe and crushing measures" if there were further "aggression and hostile acts", including in southern Lebanon.

US president Donald Trump called on both sides to "immediately stop 'shooting'" and said final peace negotiations were continuing, while insisting that the US blockade would remain in place until a final deal was reached.

Trump also said he had urged Israeli prime minister Benjamin Netanyahu not to retaliate, telling the Financial Times that Netanyahu had no choice but to accept any agreement Washington reached with Iran.

Israel nevertheless launched further strikes on the southern suburbs of Beirut on Sunday, despite US efforts to move peace talks forward.

Netanyahu remained under pressure from far-right members of his coalition to continue the war in Lebanon and push for the destruction of Iran's military capabilities.

"This latest spike in the Vix seems to be going exactly the same way as May's, being viewed as an opportunity to boost exposure to stocks rather than cut back," Beauchamp said.

"Investors seem happy to believe Trump's protestations that a deal is close, even when missiles are actually in the air.

"It's a very strange world, but there's no point trying to argue with such a resilient tape."

Sentiment was also pressured by concerns that higher energy prices would keep inflation elevated and force central banks towards higher interest rates, while investors continued to question the durability of the artificial intelligence-driven rally in technology stocks.

Patrick Munnelly, market strategy partner at TickMill, said: "The FTSE 100 endured a volatile Monday session as investors weighed renewed Middle East escalation, higher oil prices, a weakening UK labour market and mixed signals from the Bank of England.

"The index dropped as low as 10,305.00 earlier in the day as Israel and Iran exchanged missile strikes before a reversal in risk sentiment."

Munnelly said Wall Street's major indices had started the week positively, rebounding from Friday's sharp fall as chip stocks recovered and signs of reduced tensions in the Middle East helped sentiment.

"The early pressure came from another rise in geopolitical risk. Brent crude climbed past $98 a barrel before easing back toward $97.17, as traders remained focused on the risk of supply disruption tied to the Israel-Iran conflict and the broader Gulf region.

"The oil move supported energy majors, but it also kept inflation concerns alive, limiting the market's willingness to chase risk."

Euro area investor sentiment improves, remains negative

On the economic front, eurozone investor sentiment improved for a second month but remained firmly negative.

The Sentix headline economic index rose 3.0 points to -13.4 in June, as concerns about a deeper slowdown eased.

The current situation and expectations indices also improved, but remained in negative territory at -20.0 and -6.5 respectively.

Sentix said confidence had continued to recover after the sharp downturn in March and April caused by the war in Iran and the surge in crude prices.

However, it said Germany remained the eurozone's "weakest link", with its current situation index falling to -42.5, the lowest since February 2025.

Sentix said Germany's weak performance was weighing on the wider eurozone recovery and that investors were giving the government a poor "economic report card" because of a lack of reform momentum.

Tech stocks stage afternoon recovery, Zealand Pharma in the red

In equity markets, European technology stocks recovered from earlier losses, with BE Semiconductor, ASML and Aixtron all trading higher by the afternoon.

Tate & Lyle surged after the UK ingredients group agreed to be acquired by US peer Ingredion in a £2.7bn deal.

On the downside, Zealand Pharma slumped after trial results for its weight-loss drug survodutide raised concerns about side effects.

The Danish company said the drug met key targets in a late-stage study, but almost a fifth of patients dropped out because of gastrointestinal events, compared with 2.9% on placebo.

Reporting by Josh White for Sharecast.com.