- Tension in the European market rises as investors fear further escalation in the Middle East.
- Pan-European Stoxx 600 index down 0.6% as President Biden tours Tel Aviv
European stocks are trading in the red as President Biden visits Tel Aviv. Investors are now wary of possible war escalation in the Middle East as Israel has requested aid from the US, and President Biden has visited in a show of solidarity.
European stocks still dipping despite President Biden’s visit to Tel Aviv
Eurozone stocks have been affected by political and economic atmospheres in the region, with the markets opening lower. Investors are digesting key corporate earnings, inflation data, and developments in the war in the Middle East.
The pan-European Stoxx 600 index was down 0.6% at noon in London, with the Tech sector dipping by 1.4% and the Energy sector rising by 0.7%. Investors have also been alarmed by a lower-than-expected reporting from the Shares of European semiconductor manufacturers. Dutch chipmaker ASML posted lower-than-expected orders, indicating that 2024 would post flat sales.
The semiconductor industry has been a major concern in the US and the EU as the two entities seek to abandon China as a partner in trading tech products in their latest economic resolutions. The US urged the EU to reduce over-reliance on China’s tech sector products earlier in the year. However, they cannot still decouple from the Asian economic behemoth completely.
Today, President Biden landed in Tel Aviv to show solidarity with Israel in their fight with Palestine over the Gaza Strip. This geopolitical act is expected to have a considerable economic effect. China, Russia, UAE, and other nations have souring business ties with the EU, and the US supports Palestine. However, it is still yet to be seen if the two nations will agree on a ceasefire or if shelling will continue.