European shares subdued as oil jumps after US-Iran tensions escalate

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July 13, 2026 3:11 AM EDT

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 7, 2026. REUTERS/staff

By Tharuniyaa Lakshmi and Niket Nishant

July ‌13 (Reuters) - European shares were ​subdued on ​Monday as investors largely stuck to the sidelines after renewed tensions in the Middle East, while counting on the upcoming earnings season to provide fresh momentum.

The pan-European STOXX 600 index was ‌flat at 641.01, after logging its sharpest weekly loss since April on Friday.

The latest ⁠U.S.-Iran strikes have dimmed hopes for an imminent end to the war, and analysts have cautioned against being too quick to price ‌in a resolution.

Oil prices rose over 4.8% ‌on Monday. They had settled back to pre-war levels towards the end of June, but have since traded higher due to uncertainty about the conflict.

Energy stocks rose 2.2% and were the biggest gainers on ​the STOXX 600, while defence shares slipped 1.4%.

Travel and leisure stocks lost 1.2% and were among the worst-performing sectors, with Lufthansa, Ryanair and TUI falling between 1.1% and 4.1%.

The tech sector also came under pressure, ⁠down 0.6%, tracking declines in global peers. SK Hynix's South Korean-listed shares shed 15.4% after surging on their Nasdaq debut on Friday.

"Investors are looking ahead to ​the start of the earnings season and the big interest this week is going to be ASML... it will be a big early test for the tech sector," ​said David Morrison, senior market analyst at Trade Nation.

Markets are ‌also contending with shifting interest rate expectations as central banks around the world try to gauge the inflationary impact of higher oil prices.

The European Central Bank is expected to ⁠deliver at least a quarter-point rate hike this year, according to LSEG-compiled data.

"Their job has got a lot harder over the last week or so," said Christopher Tripp, general manager, international, at futures trading platform NinjaTrader.

"It would be quite easy to ⁠be drawn into a reactionary kind of approach. But from what I've seen, they tend to play the numbers as they ​come out."

Among individual stocks, Plus500 slumped 14.9% to the bottom of the STOXX 600 after the fintech broker kept its annual forecast unchanged.

Kongsberg Gruppen fell 6.8% after the Norwegian defence and technology firm's second-quarter orders missed expectations, while a recent spin-off ‌affected its cash flow more than expected.

London-listed Watches of Switzerland Group rose 4.2%. The company has held talks in recent months over potential offers to take the luxury ‌watch retailer private, Reuters reported.

Dulux paint maker AkzoNobel was slightly higher after Nippon Paint offered to buy the firm's decorative ⁠paint business for €7.5 billion ($8.55 billion).

Vodafone rose 5.5%, extending ‌Friday's rally after French billionaire Xavier ​Niel said he planned to buy a near $6 billion stake in the telecoms group from UAE's E& Group .

(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Nivedita Bhattacharjee, Sonia Cheema and ‌Susan Fenton)


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