European shares dip as Middle East caution lingers

Published Wed, May 20, 2026 · 03:37 PM

EUROPEAN shares edged lower on Wednesday (May 20) as investors remained cautious with war-driven inflation fears pressurising bonds, while markets kept a close watch on US-Iran negotiations.

The pan-European Stoxx 600 dipped 0.2 per cent to 610.37 points, as of 0701 GMT. Other regional bourses were also lower with Germany’s DAX and France’s CAC 40 down 0.2 per cent each.

President Donald Trump said on Tuesday the war would be over “very quickly”, while Vice-President JD Vance talked up progress in talks with Teheran about an agreement to end hostilities.

Brent crude was at about US$110 a barrel, while bonds remained under pressure as money markets anticipate at least two rate hikes from the European Central Bank before the end of the year.

Meanwhile, the European Union stuck a provisional agreement to remove import duties on US goods, as part of a trade deal with Washington last July, and before Trump’s deadline of July 4 when he threatened to hike tariffs if the deal was not implemented.

In early trade, Euronext advanced 4.3 per cent after reporting first-quarter earnings above market expectations.

Marks & Spencer rose 5 per cent after forecasting profit growth for the next year after annual profit slid due to a cyber hack disruption. REUTERS