European stocks ended lower on Friday, pressured by persistently high energy prices and their drag on the region’s economy, despite stronger earnings from the technology sector. The Eurozone’s STOXX 50 slipped 0.3% to 5,885 and the STOXX 600 declined 0.6% to 611, with both benchmarks posting losses for a fifth straight session.
Geopolitical tensions weighed on sentiment, as measures by Iran and the US to block commercial vessels in the Strait of Hormuz undermined hopes of an imminent agreement and kept pressure on global energy supplies. This, in turn, fueled expectations of higher interest rates and hurt equity markets.
Sovereign bond yields held on to their weekly gains, after several ECB Governing Council members signaled the need for a rate hike this quarter. Higher yields pressured bank stocks, with Santander and BNP Paribas each falling 1.5%. Industrials also underperformed: Safran dropped 3% and Rheinmetall 6%, while Eni slid 1.2% after missing earnings estimates. By contrast, SAP jumped 4.6% following a strong earnings report.
