FX.co ★ European Stocks Edge Down as Middle East Conflict Escalates

On Monday, the STOXX 50 experienced a decline of 0.6%, while the STOXX 600 saw a decrease of 0.4%, signaling a modest shift towards safer assets amid escalating tensions in the Middle East. The financial markets were unsettled following the United States' direct involvement in Israel's conflict, marked by airstrikes on Iran over the weekend. Despite the elevated geopolitical risk, market reactions were not as severe as many had expected. Traders are cautiously monitoring Iran's potential response, with hopes that the conflict can remain contained. A significant concern is the possible closure of the Strait of Hormuz, which could severely impact oil markets. In terms of economic data, preliminary Purchasing Managers' Indexes (PMIs) offered a mixed view: private sector activity in Germany rebounded into expansion, while in France, it continued to decline. In corporate news, Novo Nordisk saw its shares drop by more than 2%, despite revealing generally positive results from late-stage trials of its weight-loss medication, CagriSema. Conversely, ASML Holding's shares rose by over 1%, as the company attempted a recovery from significant losses sustained in the previous week.