European equities moved broadly lower on Tuesday as escalating tensions between the United States and Iran unsettled investors, pushed oil prices higher and drove long-dated eurozone government bond yields to multi-year highs.
Brent crude futures climbed above $91 a barrel after U.S. President Donald Trump ruled out extending a temporary ceasefire agreement with Iran. Tehran, meanwhile, said it was preparing to adopt a “fully offensive” military posture, further reducing expectations for an easing of the conflict.
Strait of Hormuz Incident Adds to Market Concerns
Fresh concerns over security in the Middle East emerged after a cargo vessel was struck by a projectile while travelling through the Strait of Hormuz, according to the UKMTO.
The incident added to worries surrounding the safety of commercial shipping through the strategically important waterway, increasing uncertainty around global energy supplies and supporting higher crude prices.
Against this backdrop, European markets remained under pressure. France’s CAC 40 Index declined 0.4%, while Germany’s DAX Index fell 0.3%.
The U.K.’s FTSE 100 Index moved against the broader regional trend, however, gaining 0.2%.
UK Unemployment Holds at 4.9%
Investors also assessed fresh economic figures from the United Kingdom, where the unemployment rate remained at 4.9% in the three months to June, unchanged from the previous period, according to the Office for National Statistics.
The number of job vacancies continued to decline, falling by 6,000 to 707,000 during the three months to July.
Currency markets were relatively subdued, with the U.S. dollar edging higher but remaining close to multi-month lows against major counterparts.
Investors were awaiting several U.S. economic releases later in the session, including import and export prices, housing starts, industrial production and pending home sales.
Basilea Pharmaceutica Surges After Profit Upgrade
Among individual stocks, Basilea Pharmaceutica (TG:PK5) shares surged after the Swiss biopharmaceutical company raised its 2026 profit outlook.
The revised forecast followed a strong first-half performance, with net profit increasing 77% compared with the corresponding period last year.
HgCapital Trust (LSE:HGT), meanwhile, moved lower after the British investment trust announced plans to invest approximately £20 million through its manager Hg in Nourish Care, a nutritional diet consulting platform.
Mining heavyweight BHP (LSE:BHP) traded modestly higher after reporting a 9% increase in annual net profit.
With geopolitical risks driving energy prices and bond yields higher, European markets remained largely defensive as investors monitored developments surrounding Iran and the strategically important Strait of Hormuz.
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