European stock markets declined on Thursday as fresh military strikes between the United States and Iran intensified concerns over rising energy costs and global inflationary pressure.
The U.K.’s FTSE 100 Index (LSE:JMAT, LSE:SSE, LSE:BT.A) led losses with a 1% drop, while France’s CAC 40 and Germany’s DAX Index each fell approximately 0.6% during the session.
The United States carried out additional self-defense strikes in southern Iran, while Tehran reportedly launched attacks targeting a U.S. air base in response.
The escalating conflict pushed Brent crude prices nearly 3% higher, with the benchmark reaching around $97 per barrel during trading.
Investor sentiment weakened considerably as markets digested the implications of sustained military activity in a strategically vital energy-producing region.
Airline stocks came under particular pressure, with higher oil prices raising concerns about increased fuel costs and weaker profitability across the sector.
Johnson Matthey (LSE:JMAT) shares declined after the British specialty chemicals company announced a $360 million cash deal to acquire U.S.-based emissions catalyst producer CORMETECH on an enterprise-value basis.
Energy company SSE (LSE:SSE) also traded lower after reporting a 5% decline in adjusted earnings per share for the financial year ended March 31, 2026.
BT (LSE:BT.A) shares fell following reports that the British government would oppose any move by Sunil Bharti Mittal to increase his ownership stake in the telecommunications group beyond 25%.
Semiconductor stocks bucked the broader trend after Soitec (EU:SOI) reported annual sales figures that exceeded market expectations, providing a positive lift to the sector.
The stronger-than-expected results from Soitec boosted shares of sector peers STMicroelectronics (BIT:STMMI) and Infineon (TG:IFX), both of which recorded gains during the session.
Despite the semiconductor bright spot, broader market confidence remained fragile as traders monitored developments in the Middle East for any further signs of escalation.