By Joe Stonor
Germany's industrial-heavy, growth-sensitive DAX index was Europe's biggest loser in a difficult day for the continent's stocks.
Blue-chip European indexes fell more than 2% on Thursday as oil and gas prices soared. European benchmark natural gas prices rose 14% after Israel struck the world's largest gas field Wednesday, and both Iran and the U.S. threatened further attacks on Middle Eastern energy infrastructure.
The DAX closed down 2.8% at its lowest level since April last year, when markets were recovering from the shock from President Trump's 'Liberation Day' tariff announcements. Only one of the DAX's 40 constituent companies finished Thursday higher; exchange owner Deutsche Boerse gained 0.3%.
Europe is especially vulnerable to energy price shocks given its dependence on imported fuel.
"Low levels of gas in storage coupled with an over-reliance upon imported energy [signal] an impending crisis that will worsen with each passing day," Scope Markets analyst Joshua Mahony said.
The DAX's large proportion of energy-intensive industrial and chemicals companies makes it especially reactive to such shocks. Index heavyweights Siemens and BASF fell 3.6% and 4.5%, respectively.
In Paris, the CAC 40 slid 2% as consumer-sensitive luxury goods companies that dominate the index tumbled. Hermes International closed 5.8% lower at a near two-and-a-half-year low as the energy shock threatens a sustained rise in consumer confidence-sapping inflation.
Italy's FTSE MIB and the Spanish IBEX 35 each closed around 2.3% lower.
"Europe's fragile economies are ill-placed to weather an oil price shock, and this realization is finally beginning to have material impact on equity markets this side of the Atlantic," IG's Chris Beauchamp said.
Surging oil prices have benefited some, however. Though the FTSE 100 dropped 2.35% Thursday, its losses so far since the conflict began haven't been as pronounced as some of its European peers thanks to the index's higher proportion of defensive stocks, or those less sensitive to an economic growth slowdown.
Oil super majors BP and Shell have gained 22% and 12%, respectively, since the start of the month. Shell closed flat Thursday, even after the company said that it had shut down production at its Pearl GTL plant in Qatar, the world's largest gas-to-liquids plant.
Write to Joe Stonor at josephmichael.stonor@wsj.com
(END) Dow Jones Newswires
March 19, 2026 13:40 ET (17:40 GMT)
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