A portrait of Iran’s new supreme leader Mojtaba Khamenei is shown on a screen during the funeral of Iranian Revolutionary Guards Corps (IRGC) commanders, military commanders and others killed during the early days of the US-Israeli attack on Iran, in Tehran’s Enhrab Square on March 11, 2026.
Atta Kenare | AFP | Getty Images
LONDON – European stocks fell on Thursday, erasing Wednesday’s gains as investors struggled to decipher mixed messages on the status of Middle East peace talks.
The pan-European Stoxx 600 fell 1% shortly after 10:20 a.m. London time (6:20 a.m. ET), with all major exchanges and most sectors trading in the red. british FTSE100 The index was trading 1.05% lower, with Germany’s dachshund France, down 1.3% CAC40 Italy decreased by 0.8%. FTSE MIB 1% lower.
Mining and tech stocks led the decline, with each sector declining 3.6% and 2.2%, respectively, as risk-off sentiment returned to the market.
UK Retailers in Company News Next reported strong full-year profits on Thursday and raised its outlook, but warned investors that instability in the Middle East could “curb growth” in overseas markets if the conflict continues. The company’s stock price last rose 5%.
“There will likely be knock-on effects to other businesses’ costs, selling prices and consumer demand,” CEO Lord Wolfson said in the company’s latest earnings report.
The CEO described Next’s first-quarter sales as “encouraging”, while European peer Hennes & Mauritz announced subdued sales for the first three months of 2026.
Citi analysts said current trading was “slightly weaker than expected.” Following the announcement, H&M shares fell 3.6% in early trading.
Global markets are reacting to contradictory statements from Washington and the Iranian government over the past 48 hours regarding the status of peace negotiations. While the United States insists talks are underway on a peace plan, Iran denies direct communication with the United States on the issue.
Iranian Foreign Minister Abbas Aragushi told state media on Wednesday that authorities were considering US proposals to end the war, but reportedly said Iran had no intention of holding talks with the US.
He added that the exchange of messages between the two countries through an intermediary “does not imply negotiations with the United States,” according to Reuters.
Iranian state media reported on Wednesday that the Islamic Republic would reject the US ceasefire offer and instead respond with a five-point list that would give Iran sea control of the Strait of Hormuz.
Asian markets were mixed in overnight trading, but U.S. stock futures were little changed early Thursday.
European markets will be closely watching news of the G7 foreign ministers’ meeting in France on Thursday and Friday. The wars in Iran and Ukraine will be at the top of the agenda. Delegations from Saudi Arabia, Brazil, India, South Korea and Ukraine will also attend.
