April 24 (Reuters) - European shares fell on Friday and were set to end the week lower, as investors remained concerned about the lack of progress toward a resolution to the Middle East conflict,
European equities log steep weekly losses with no resolution to MidEast conflict
Market Performance and Sector Analysis Amid Middle East Tensions
By Ragini Mathur and Twesha Dikshit
April 24 (Reuters) - European shares posted a sharp weekly loss on Friday, as investors worried about risks to growth and inflation with energy supplies still severely disrupted by the conflict in the Middle East.
European Indices and Weekly Performance
The pan-European STOXX 600 index edged down 0.6% on the day, to 610.65, a more than two-week low. It logged a weekly decline of 2.5%, snapping a four-week streak of gains.
Most regional markets also declined, with Spain's benchmark index <.IBEX> falling 1.1%, while France's was down 0.8%.
Comparative Performance: Europe vs. U.S. Markets
European equities outperformed U.S. markets at the start of the year but have lagged during the war on concerns over the continent's vulnerability to higher energy prices.
Sector Opportunities and Risks
"We still see opportunities in sectors that are less sensitive to higher energy prices, such as health care, and in areas supported by secular trends, such as industrials," said Mark Haefele, chief investment officer at UBS Global Wealth Management, adding that he did not expect higher energy prices to trigger a recession.
Sector Movements and Notable Stocks
Most sectors traded in the red, with aerospace and defence leading declines with a 3.2% fall.
Technology Sector Gains
Technology stocks , however, gained 1.5%, helped by a 4.7% jump in SAP shares after the German software maker beat first-quarter profit estimates on strong growth in its cloud business.
Chip stocks advanced with BE Semiconductor Industries up 4.3%, a day after reporting strong order intake and guidance. ASML and ASMI added about 2% each.
Healthcare and Financials
Healthcare shares and financials lost 1.7% and 1%, respectively.
Novo Nordisk bucked the trend, adding 5.4% after rival Eli Lilly's obesity pill trailed prescriptions to Novo's oral Wegovy.
Other Major Movers
Among other movers, Tomra tumbled 24% after the Norwegian recycling technology provider missed first-quarter revenue and profit estimates.
Swedish technology and industrial group Indutrade fell 15% after reporting first-quarter net sales below analyst expectations.
Geopolitical Developments and Economic Impact
Iran's Foreign Minister Abbas Araqchi is expected to travel to Pakistan's capital Islamabad to discuss proposals for restarting peace talks with the United States, Pakistani government sources said.
Benchmark Brent crude oil futures held above $100 a barrel [O/R].
German business sentiment deteriorated more than expected in April as the Iran war threatens the recovery of Europe's biggest economy.
ECB Policy Outlook
The European Central Bank meets next week with markets pricing in a 76% chance that policymakers will leave rates unchanged, according to LSEG data. However, traders still expect rate hikes later this year if energy disruptions persist.
"With the ECB's focus on inflation expectations and fears that war-related effects could push companies to pass on costs, we're likely to see the ECB eventually still wanting to raise rates, which we think they’ll then have to roll back in 2027," said Luca Bindelli, head of investment strategy at Lombard Odier.
(Reporting by Ragini Mathur and Twesha Dikshit; Editing by Eileen Soreng and Rashmi Aich)
