European equities surrendered modest early gains to trade lower on Tuesday, with both the STOXX 50 and STOXX 600 slipping into flat-to-negative territory. Investors remained focused on the conflict involving Iran and the outlook for potential de-escalation. While reports highlight continued communication and diplomatic efforts to end the war, fighting has persisted, and the Wall Street Journal reported that Saudi Arabia and the UAE are moving closer to entering the conflict against Tehran.
Iran has sustained its attacks and insists there are no ongoing negotiations with the United States. At the same time, oil prices continue to climb, adding to inflationary pressures. Preliminary Euro Area PMI readings for March already indicate rising price pressures and slowing growth, underscoring the economic fallout from the Middle East crisis.
At the sector level, industrials and financials lagged the broader market, while basic materials outperformed. Among individual names, SAP (-3.4%) and Leonardo (-3.1%) were among the weakest performers.
