Europe open: Shares fall as Iran war continues; Oil gains
By Frank Prenesti
Date: Thursday 05 Mar 2026
(Sharecast News) - European shares opened lower on Thursday as the US-Israeli war against Iran and Lebanon continued.
The pan-regional Stoxx 600 index was down 0.34% to 610 at 0837 GMT. Bellicose language from ministers in Washington and Tel Aviv overnight did nothing to assure markets that the war would be over anytime soon.
Israel bombed more targets in Iran and the Lebanese capital of Beirut on Thursday. Meanwhile the Israeli defence minister Israel Katz claimed his US counterpart the ultra-hawkish Pete Hegseth told him to "continue to the end, we are with you", according to a statement by his office.
Fears of a widening of the conflict escalated on a report that missiles and drones flying from the direction of Iran fell near the airport in the Azerbaijani exclave of Nakhchivan, according to a source close to the government.
Oil prices skipped back above $84 a barrel while gas futures for April were up 7% to €52.22 per kilowatt hour.
"Market volatility is turning investors' heads as the Middle East conflict intensifies and enters a sixth day. Earlier reports from the New York Times that Iran was ready to negotiate were later dashed by Iranian authorities," said Swissquote Bank senior analyst Ipek Ozkardeskaya.
"Chinese financial institutions are scaling back their exposure to Middle Eastern debt - including Aramco - and despite US escort and insurance plans, traffic through the Strait of Hormuz reportedly came to a complete halt yesterday, with no ships transiting."
"Donald Trump says that the US is doing very well in Iran, and investors are willing to believe him, hoping the conflict could move toward a resolution. But the news tell another story."
"Frankly, I'm not sure why investors think so. There is no clear plan, missiles and bombs continue to fall, and oil and gas prices are trading higher this morning.
"On the trade front, the US said it will raise the global tariff from 10% to 15%, but Europeans would keep their 10% tariff rate - whoop whoop - except perhaps for Spain. Trump said he does not want to trade with Spain anymore as the country is unwilling to get involved in the US/Israel conflict with Iran."
In equity news, Shares in Rentokil and Entain surged on results.
Reporting by Frank Prenesti for Sharecast.com
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