European Markets Slip as Germany Cuts Growth Forecast

(MENAFN) European stock markets closed lower on Wednesday as investors reacted to revised economic forecasts from Germany, ongoing instability in Middle East energy routes, and continued uncertainty surrounding the US-Iran ceasefire.

The STOXX 600, which tracks major companies across Europe, fell 0.35% to 613.88, reflecting cautious sentiment across the region.

National indices also ended in negative territory. Germany’s DAX declined 0.31%, while the UK’s FTSE 100 slipped 0.21%. France’s CAC 40 recorded a sharper drop of 0.96%, with smaller losses also seen in Italy’s FTSE MIB and Spain’s IBEX 35.

Currency markets also showed mild weakness in the euro against the US dollar during late trading.

Investor attention was heavily influenced by Germany’s revised economic projections, which significantly lowered growth expectations for the coming years while raising inflation forecasts. Authorities attributed the downgrade to higher energy costs and continued supply chain disruptions linked to geopolitical tensions and shipping constraints.

Market participants are particularly focused on disruptions affecting key maritime routes, which have contributed to increased energy prices and added pressure on European households and businesses.

Sentiment was further affected by ongoing uncertainty over the ceasefire arrangement involving Iran, which remains in place but is seen as fragile amid unresolved diplomatic negotiations and continued military positioning in the region.

Rising energy costs also contributed to higher government bond yields across parts of the eurozone, adding further pressure on equity markets and keeping investor risk appetite subdued.

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