European stocks closed lower on Wednesday as concerns about Middle East tensions and worries about a fresh tariff threat by the United States rendered the mood bearish. Investors also reacted to regional PMI data.
Iran launched ballistic missiles in the Gulf region and the US retaliated by striking Qeshm Island, which directly blocks the entrance to the Strait of Hormuz, is also the base of the IRGC's network of underground facilities and defensive positions across the island.
The pan-European Stoxx 600 shed 0.66%. The UK's FTSE 100 ended down by 0.4%, Germany's DAX closed 1.31% down, and France's CAC 40 settled lower by 0.71%. Switzerland's SMI finished with a loss of 0.66%.
Among other markets in Europe, Austria, Belgium, the Czech Republic, Denmark, Greece, Iceland, Ireland, Netherlands, Russia, Spain, Sweden and Turkey closed weak. Finland, Norway, Poland and Portugal ended higher.
In the UK market, ICG tumbled 4.6%. Burberry Group closed lower by 4.27% and Fresnillo shed 3.71%. Rio Tinto, Anglo-American Plc, Antofagasta, Experian, Croda International, LSEG, Standard Chartered, Barclays, St. James's Place and Lion Finance drifted down 2%-3%.
Bunzl jumped 4.75%. SSE, Howden Joinery Group, Tesco, Sainsbury (J), Whitbread and United Utilities Group gained 2%-3.5%. Convatec Group, GSK, Coca-Cola Europacific Partners, Shell, BP, Halma, Smith & Nephew, Next, Centrica and Imperial Brands also ended with strong gains.
In the German market, Scout24 drifted lower by about 5.2%. SAP, Deutsche Bank, Heidelberg Materials, Mercedes-Benz, Adidas, Continental, Vonovia, Deutsche Telekom, BMW, Porsche Automobil Holding, Allianz, Symrise, MTU Aero Engines and Commerzbank shed 2%-4.3%.
RWE climbed 3.7%, Merck, Bayer and E.ON gained 1.7%-2%, while Siemens, Fresenius Medical Care, Qiagen, Rheinmetall and Daimler Truck Holding posted moderate gains.
In the French market, Kering, Stellantis, Teleperformance, Capgemini, LVMH, Renault, Hermes International, L'Oréal, Edenred and Dassault Systèmes lost 2%-4%.
Airbus, AXA, Legrand, Safran, BNP Paribas, Schneider Electric, Pernod Ricard, Unibail Rodamco and Bureau Veritas also closed notably lower.
Veolia Environment jumped 2.3%. Air Liquide gained nearly 2%, while Carrefour, STMicroelectronics and TotalEnergies moved up 1.2%-1.4%.
In economic news, data from S&P Global showed Germany's Composite PMI was revised higher to 48.8 in May from a preliminary of 48.6 and compared to 48.4 in April, but continuing to signal a second straight month of contraction in private sector activity.
The services sector PMI reading came in at 48.1 in May, compared to 46.9 in April, while the manufacturing PMI was 50.1 in May, down from 51.4 a month earlier.
Data from Eurostat showed producer prices in the eurozone rose 0.6% month-on-month in April 2026, following a 3.4% surge in March. On an annual basis, producer prices advanced 4.9% in April, the strongest increase since March 2023.
Final survey data from S&P Global showed the euro area private sector logged back-to-back contractions in May, marking its biggest fall in 18 months.
The final composite output index dropped to 48.5 in May from 48.8 in April. However, the score was above the flash estimate of 47.5. The Services PMI score was 47.7 compared to 47.6 a month earlier, while the manufacturing PMI came in at 51.6 compared to 52.2 a month earlier.
France's private sector logged its steepest fall since January 2024. The final composite PMI fell to a 28-month low of 44.9 from 47.6 in the previous month but remained above the initial score of 43.5. The services PMI fell to 44.3 in May from 46.5 in April. The headline measure posted its lowest reading in five-and-a-half years. The flash services PMI score was 42.9.
Data from S&P Global showed the S&P Global UK Composite PMI fell to 49.7 in May from 52.6 in the previous month, revised higher from the preliminary estimate of 48.5 and firmly below the initial market expectations of an expansion of 51.6.
The Services PMI score came in at 49.3 for May, down from 52.7 in April, while the manufacturing PMI score was 53.9, up slightly from previous month's 53.7.
