European stock markets started the week sharply lower, unsettled by increased tensions in the Persian Gulf. The CAC 40 fell below 8,000 points, down 1.71% to 7,976 points, while the Euro Stoxx 50 dropped 2.05% to 5,760 points. In Frankfurt, the DAX slid 1.22% on a day where the London Stock Exchange was closed for a holiday.
Geopolitical concerns intensified around the Strait of Hormuz, amid conflicting reports between Tehran and Washington regarding a maritime incident. The United Arab Emirates reported missile firings from Iran, mostly intercepted, with one projectile falling into the sea. A South Korean vessel was also hit by an explosion followed by a fire in the area, but no casualties were reported.
In response, oil prices surged, with Brent gaining 5.32% to $113.99 per barrel and WTI rising 3.52% to $105.25. On the macroeconomic front in the US, industry orders rose 1.5% in March, exceeding expectations.
In Europe, manufacturing activity indicators confirmed improvement. France saw its PMI rise to 52.8, the highest since May 2022, while the eurozone hit 52.2, the highest in over four years. Germany’s PMI stood at 51.4. Investor sentiment in the eurozone also improved in May, with the Sentix index at -16.4, better than forecasted.
On the market front, Soitec led the SBF 120 with a 20.91% surge, driven by a positive note from Deutsche Bank, pushing its year-to-date gain to over 560%. Conversely, EssilorLuxottica (-4.41%) and Société Générale (-3.97%) were among the top decliners in the CAC 40, while Capgemini (+3.01%) and STMicroelectronics (+2.15%) performed well.
The German automotive sector was impacted by Donald Trump’s announcement of a 25% tariff increase on European vehicles, leading to significant declines for Porsche, Mercedes, BMW, and Volkswagen.
Lastly, in the forex market, the euro dipped slightly by 0.24% against the dollar, reaching 1.1697.
