European Markets Close Weak On Tariff, West Asia Conflict Tensions

FRANKFURT, May 5 (Bernama-dpa/AFX) -- European stocks closed mostly weak on Monday as West Asia tensions and fresh tariff threats by US President Donald Trump weighed on investor sentiment, reported dpa/AFX.

The US President announced on Monday that he might raise tariffs on European cars and trucks, saying the European Union had failed to fully comply with a trade agreement negotiated with the US.

Iran's navy reportedly said that it has prevented US ships entering the Strait of Hormuz, after Trump said the US military would help guide stranded vessels today.

Meanwhile, US denied Iranian state media claims that a US vessel was hit by missiles from Iran, adding, "No US Navy ships have been struck."

The latest developments on the US-Iran conflict front pushed oil prices up sharply. Brent crude futures moved past US$114 a barrel, gaining over 5 per cent, triggering inflation concerns.

The pan-European Stoxx 600 fell 0.99 per cent. Germany's DAX ended down 1.24 per cent and France's CAC 40 lost 1.71 per cent Switzerland's SMI closed 1.01 per cent down. The UK market remained closed for Bank Holiday.

Among other markets in Europe, Austria, the Czech Republic, Denmark, Netherlands, Portugal, Russia, Spain, Sweden and Turkey closed weak.

Greece, Iceland, Ireland and Norway ended higher, while Belgium, Finland and Poland closed flat.

In economic news, a report from S&P Global showed the S&P Global Germany Manufacturing PMI was revised slightly higher to 51.4 in April 2026 from a preliminary of 51.2, compared to a 46-month high of 52.2 in March.

Eurozone investor sentiment improved unexpectedly in May, driven by investor expectations that the conflict with Iran would not escalate further, a survey conducted by the behavioural research institute Sentix showed Monday. The investor sentiment index rose to -16.4 in May from -19.2 in April. The score was forecast to fall to -20.9.

The euro area factory activity expanded at its strongest pace in nearly four years in April as manufacturers front-loaded their orders due to fears of the war-induced price increases and supply shock, final data from S&P Global showed Monday. The manufacturing Purchasing Managers' Index rose to a 47-month high of 52.2 in April, in line with flash estimate, from 51.6 in March.

--BERNAMA-dpa-AFX