European markets opened lower on Wednesday morning as geopolitical tensions, particularly in the Middle East, dampened investor sentiment.
Britain’s FTSE 100 fell by 0.3%, with companies like Compass Group plc, GSK plc, and Flutter Entertainment among the worst performers. Similarly, Germany’s DAX index dropped by 0.3%, weighed down by Siemens AG and Deutsche Bank AG. In France, the CAC 40 index dipped by 0.2%, while the STOXX 600 index slid by 0.3%.
The downturn comes amid rising tensions in the Middle East, with Israel launching its most intense strike on Gaza since its January ceasefire agreement with Hamas. At the same time, Russian President Vladimir Putin dashed hopes for a peace deal in Ukraine, rejecting the US’s proposal for a 30-day ceasefire and instead agreeing only to stop attacks on Ukrainian energy infrastructure.
Markets were also unsettled by US President Donald Trump’s announcement that sectoral and reciprocal tariffs would take effect on April 2. Investors are also closely monitoring the US Federal Reserve’s interest rate decision set for later on Wednesday.
Despite these concerns, Kyle Chapman, FX markets analyst at Ballinger Group, noted that markets are likely to pause their focus on trade policies and geopolitics in favor of evaluating upcoming central bank decisions in the next few days.
