European markets under pressure in a geopolitically charged sky

European stock markets began the week in sharp decline, impacted 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 by 2.05% to 5,760 points. In Frankfurt, the DAX slipped 1.22% in a session marked by the closure of the London Stock Exchange for a holiday.

Geopolitical concerns heightened around the Strait of Hormuz, amid conflicting reports between Tehran and Washington regarding a maritime incident. Additionally, 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, resulting in no casualties.

In this context, oil prices significantly increased, with Brent up 5.32% to $113.99 per barrel and WTI up 3.52% to $105.25.

On the macroeconomic front, US factory orders rose by 1.5% in March, exceeding expectations.

In Europe, manufacturing activity indicators showed improvement: the PMI in France reached 52.8, the highest since May 2022, while in the eurozone it hit 52.2, the highest in over four years. In Germany, it stood at 51.4. Eurozone investor confidence improved in May, with the Sentix index at -16.4, better than expected.

Among the top performers, Soitec led the SBF 120 with a 20.91% surge, backed by a positive note from Deutsche Bank, pushing its year-to-date increase to over 560%. On the other hand, EssilorLuxottica (-4.41%) and Societe Generale (-3.97%) were among the biggest losers in the CAC 40, while Capgemini (+3.01%) and STMicroelectronics (+2.15%) fared well.

The German automotive sector was hit by Donald Trump’s announcement of a 25% tariff increase on European vehicles, leading to significant declines for Porsche, Mercedes, BMW, and Volkswagen.

Finally, in the foreign exchange market, the euro slightly dropped by 0.24% against the dollar, to 1.1697.