(Bloomberg) — European stocks hit a session low after Iranian Supreme Leader Mojtaba Khamenei said the Strait of Hormuz should stay closed, adding to concerns over disruption to global oil supplies.
The Stoxx Europe 600 index fell as much as 0.8%, and was 0.6% lower by 2:06 pm in London. Banks led the declines, while chemicals and energy stocks outperformed.
Brent crude oil traded close to $100 a barrel after Khamenei’s comments on the crucial shipping route and after US President Donald Trump said he was more worried about stopping Iranian nuclear weapons than oil prices. The Strait of Hormuz, through which a fifth of global oil typically flows, remains effectively closed and has led to major Gulf producers cutting output.
Swings in European equity prices have intensified since the beginning of the Iran war, with the region’s main volatility index reaching the highest levels since the tariff turmoil of last April.
Meanwhile, Europe’s index of banking stocks sank as much as 3.4%. Deutsche Bank AG was among the biggest decliners, losing 5.2% after the lender flagged a €26 billion ($30 billion) exposure to private credit, an asset class that’s grappling with fund redemptions.
“The concerns over private credit, which emerged well before the US strikes on Iran, are adding to the negative mood despite the fact that European banks have little exposure on that asset class,” said Jerome Legras, head of research at Axiom Alternative Investments.
Among other single stocks, Zalando SE jumped as much as 14% after the German online fashion platform reported earnings and said jeans maker Levi Strauss & Co. will be the first US customer for its business-to-business software.
Abivax SA soared as much as 18% after French media reported that the biotech has granted AstraZeneca Plc exclusive access to confidential information until March 23 with a view to formalizing an offer.
Elsewhere, building material stocks dropped after the European Commission was said to consider relaxing carbon-permit supply rules and allowing more state aid as part of an emergency plan to cut spiking power prices. Holcim Ltd. was 3.1% lower. Heidelberg Materials AG dropped 3.2% and Buzzi SpA slid 2.5%.
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–With assistance from Michael Msika.
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