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08.07.202616:14:11UTC+00European Stocks Drop Sharply

European stocks closed sharply lower on Wednesday, mirroring a global equity sell-off after a fresh exchange of strikes between Iran and the US heightened geopolitical tensions and inflation risks for the Eurozone. The Euro STOXX 50 dropped 2.0% to 6,190, while the STOXX Europe 600 lost 1.8% to close at 634. The US moved to block Iranian oil exports after the conflict reignited and President Trump invalidated the existing ceasefire. The resulting surge in energy prices pushed sovereign bond yields higher, as markets priced in a greater likelihood that the ECB will deliver additional interest rate hikes this year. Shares of major lenders were hit hard, with Santander and Deutsche Bank each shedding more than 5%. UniCredit fell 2.9% after it raised its stake in Commerzbank, boosting expectations of a full takeover in the coming quarters. At the same time, the unwinding of the AI trade continued, with software stocks facing renewed selling pressure and SAP sliding 4%.

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