Europe close: Stocks fall on oil price rise, tech sentiment

(Sharecast News) - European shares closed mostly lower on Wednesday after a surprise Iranian attack on US military targets in the Gulf sent oil prices sharply higher, while another heavy technology sell-off in Asia weighed on sentiment.

The Stoxx 600 fell 0.29% to 645.01, Germany's DAX edged down 0.01% to 25,460.48 and France's CAC 40 lost 0.6% to 8,408.27, while London's FTSE 100 gained 0.34% to 10,908.41.

"The FTSE 100 came within a whisker of smashing February's closing high record today," said Danni Hewson, head of financial analysis at AJ Bell.

"The positive run might have much to do with the unpleasant jump in the oil price, which has bolstered stocks like BP, but it's also fuelled by an earnings season which has got off to a remarkably positive start."

Brent crude surged 7.15% to $90.10 a barrel and West Texas Intermediate jumped 6.33% to $84.28 after Iran launched multiple ballistic missiles at US forces in the Middle East, ending the recent pause in fighting.

Asian markets also remained under heavy pressure overnight as the semiconductor rout deepened, with South Korea's Kospi dropping a further 8.3%.

SK Hynix fell 9% despite reporting a six-fold increase in quarterly profit, while Samsung Electronics lost 6% ahead of its results on Thursday.

The weakness followed a 1% fall in the Nasdaq on Tuesday amid concerns that earnings expectations for AI-related companies had run ahead of fundamentals.

"A return to the US-Iran conflict seems baked in regardless of anything else that happens tonight," said said IG chief market analyst Chris Beauchamp.

"As a result oil prices have staged a huge reversal from yesterday's lows, piling on the pressure ahead of the Fed decision.

"The stakes for markets could not be higher right now."

Mortgage approvals rise in the UK

In economic news, UK mortgage approvals rose to 58,200 in June from 56,600 in May, according to the Bank of England, while net mortgage borrowing increased to �7.7bn from �3.3bn, above the previous six-month average of �4.9bn.

The effective rate on newly drawn mortgages increased to 4.35% from 4.22%, while the rate on outstanding mortgages rose to 3.96% from 3.92%.

Consumer credit borrowing edged up to �1.8bn from �1.7bn, with credit-card borrowing rising to �0.9bn from �0.6bn and other consumer credit falling to �0.9bn from �1.1bn.

Sopra Steria jumps, chips stocks under pressure

In equities, Sopra Steria surged 13.59% after raising its full-year revenue growth target, while Gerresheimer gained 6.18% after agreeing to sell Centor US Holding and its global Primary Packaging Plastics business to an Apax Partners affiliate for a combined enterprise value of around �1.5bn.

ASM International fell 4.76% despite issuing an upbeat forecast as technology stocks remained under pressure ahead of results from Microsoft and Meta.

"Both Meta and Microsoft's numbers will be given a thorough once over as nerves about the vast sums of cash being spent within the rather small AI sphere collide with another jump in the oil price, which could make central bankers decisions more difficult with inflation likely to stay higher for longer whilst the volatility remains," Hewson said.

"Only exceptional performance from US tech giants will be enough to stem the rout which has been centred on, though not limited to chip stocks."

Elsewhere, Kering jumped 16.91% after second-quarter sales at Gucci fell by less than expected, while Alten surged 19.46% after the French IT and engineering group's second-quarter results beat expectations.

Reporting by Josh White for Sharecast.com.