FRANKFURT: European shares slid to a three-week low on Wednesday amid mixed corporate results and data pointing to the economic damage caused by the Iran war, with investors cautious ahead of key global monetary policy decisions.
The pan-European STOXX 600 closed down 0.6 percent at 602.96 points.
GSK and AstraZeneca fell 5.4 percent and 1.5 percent, respectively despite posting strong first-quarter earnings.
Their declines dragged the healthcare index down 1.7 percent, making it the biggest drag on the STOXX 600.
“European companies are reporting okay numbers and some of them are ahead of expectations, but the market is not really rewarding them for that (due to the) underlying macro headwinds,” said Marija Veitmane, head of equity research at State Street.
European equities are nearly 5 percent below pre-war levels, lagging US peers and global markets, as the region’s reliance on energy imports has intensified inflation pressures and weighed on sentiment.
Data on Wednesday showed German inflation rose in April due to surging energy prices, while euro zone economic sentiment fell
to a three-and-a-half-year low this month amid the Iran war.
US President Donald Trump said he was unhappy with Tehran’s latest proposal to end the conflict, adding uncertainty over prospects for negotiations.
Most major regional bourses also fell. Germany’s DAX closed lower for an eighth straight session, its longest losing streak since 2020.
Wall Street slipped ahead of earnings from several US Big Tech firms and a Federal Reserve policy decision, as investors looked for signs that heavy AI spending is translating into earnings growth.
Focus now turns to the European Central Bank’s meeting on Thursday, where policymakers are widely expected to keep rates on hold. Markets will scrutinise guidance as officials seek to curb inflation while managing weak growth.
“The US has continued to show remarkable resilience …. Europe, on the other hand, has been showing weaker growth dynamics,” said Daniela Hathorn, senior market analyst at Capital.com.
Investors sifted through a wave of earnings to assess the war’s impact on corporate Europe.
UBS gained 3.2 percent after the Swiss bank posted better-than-expected first-quarter net profit, while Deutsche Bank fell 1.8 percent after its results. The euro zone banks index slipped 0.3 percent.
Adidas jumped 8.4 percent after the German sportswear group reported better-than-expected first-quarter operating profit.
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