European stock markets began the week with a sharp decline, hampered by renewed tensions in the Persian Gulf. The CAC 40 dropped below 8,000 points, down 1.71% to 7,976 points, while the Euro Stoxx 50 fell by 2.05% to 5,760 points. In Frankfurt, the DAX slipped 1.22% on a day marked by the closure of the London Stock Exchange for a public holiday.
Geopolitical concerns flared around the Strait of Hormuz with conflicting reports between Tehran and Washington regarding a maritime incident. Meanwhile, the United Arab Emirates reported missile firings from Iran, mostly intercepted, with one projectile falling into the sea. A South Korean ship was also hit by an explosion followed by a fire in the area, with no casualties reported.
Against this backdrop, oil prices saw a significant increase, with Brent gaining 5.32% to $113.99 per barrel and WTI rising 3.52% to $105.25.
On the macroeconomic front, US factory orders rose by 1.5% in March, falling short of expectations.
In Europe, manufacturing activity indicators confirmed improvement: in France, the PMI rose to 52.8, the highest since May 2022, while in the eurozone it reached 52.2, the highest in over four years. In Germany, it stood at 51.4. Furthermore, investor sentiment in the eurozone improved in May, with the Sentix index at -16.4, better than expected.
In terms of stocks, Soitec led the SBF 120 with a surge of 20.91%, fueled by a positive note from Deutsche Bank, pushing its increase since the beginning of the year to over 560%. Conversely, EssilorLuxottica (-4.41%) and Société Générale (-3.97%) were among the biggest losers on the CAC 40, while Capgemini (3.01%) and STMicroelectronics (2.15%) performed well.
The German automotive sector was hit by Donald Trump’s announcement of a 25% increase in tariffs on European vehicles. Porsche, Mercedes, BMW, and Volkswagen all experienced significant declines.
Lastly, in the foreign exchange market, the euro slightly dropped by 0.24% against the dollar to 1.1697.
