FRANKFURT: European shares were little changed on Tuesday as escalating tensions in the Middle East and rising oil prices kept investors cautious, while Novartis suffered its steepest one-day decline on record after reporting a second setback in its drug pipeline.
The pan-European STOXX 600 was down 0.05 percent at 649.6. Switzerland’s benchmark index fell 1.6 percent, weighed down by Novartis, which slid 10.9 percent.
Novartis was the biggest faller on the STOXX 600 after the Swiss drugmaker said its experimental treatment for a muscle-wasting disorder had failed in a late-stage trial.
The news came a day after the company disclosed that an experimental cholesterol drug had also failed a closely watched late-stage study.
Energy shares gained 0.6 percent as Brent crude futures hovered around USD98 a barrel. Oil prices rose after Yemen’s Iran-aligned Houthi forces attacked energy facilities and cities in Saudi Arabia, underscoring the risk that the conflict could spread further across the region and disrupt fuel supplies to global markets.
Mining stocks also advanced as copper prices climbed. Boliden, Antofagasta and KGHM gained between 4.6 percent and 6.3 percent, while the broader European mining index jumped 2 percent.
On the economic front, German exports unexpectedly fell in July, with weaker shipments to European Union countries and China highlighting the fragility of the trade-driven recovery in Europe’s largest economy.
Elevated oil prices have revived inflation concerns, contributing to a recent global bond selloff and strengthening expectations that central banks may need to keep monetary policy restrictive for longer.
Investors widely expect the European Central Bank to raise interest rates by 25 basis points on Thursday.
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