European stock market turn red

European markets turned red on Thursday, erasing Wednesday’s gains, as investors struggled to interpret conflicting signals about Middle East peace talks. The pan-European Stoxx 600 dropped 1%, with major indices including the FTSE 100 (-1.05%), DAX (-1.3%), CAC 40 (-0.8%), and Italy’s FTSE MIB (-1%) all retreating.

Miners and technology stocks led the decline, falling 3.6% and 2.2% respectively, as risk-off sentiment returned to markets.

In company news, British retailer Next reported strong full-year earnings and raised its guidance, though CEO Lord Wolfson warned that Middle East instability could “restrain growth” in overseas markets if conflicts persist. Next’s shares rose 5% following the announcement.

By contrast, Swedish rival Hennes & Mauritz (H&M) reported subdued first-quarter sales, sending shares down 3.6%. Analysts at Citi described trading as “slightly weaker than anticipated,” highlighting ongoing uncertainty in consumer demand.

Global markets have been reacting to mixed messages from Washington and Tehran. While the U.S. claims peace talks are underway, Iran denies direct negotiations, signaling potential risks for oil and trade markets. Iran also outlined a five-point plan that could give it control over the Strait of Hormuz, a key shipping route.

Investors are now watching the G7 foreign ministers’ meeting in France, where conflicts in Iran and Ukraine are top of the agenda. Updates from the summit are expected to influence market direction in the coming days.

Takeaway for investors: Volatility is likely to continue while geopolitical uncertainty remains high. Defensive stocks and sectors less exposed to global conflict may outperform in the short term.