March could be the worst month for European equities since 2022

European stock markets are rising on March 31, but this is unlikely to help them offset the losses of the last month. Amid supply chain disruptions and rising energy prices, Europe's benchmark Stoxx 600 index is still on the verge of its sharpest monthly decline since 2022, Reuters reports.

The pan-European index Stoxx 600 shows mixed dynamics - having added 0.2% in the first minutes of trading on March 31, it went into the negative zone several times, but at the time of publication began to grow again - adding 0.4%. French CAC 40 - in the plus by 0.23%, German DAX - by 0.38%, British FTSE 100 - is growing by 0.38%.

Investor sentiment improved on March 31 after The Wall Street Journal reported that U.S. President Donald Trump told his aides he was ready to end his military campaign against Iran even if shipping through the Strait of Hormuz remains largely closed, Reuters writes.

However, the growth on March 31 will hardly help the basic European index Stoxx 600, which has declined since the beginning of the war in the Middle East by 8.2%, to recover the monthly losses - at the end of March, the index is still likely to break the eight-month series of growth and record the first quarterly decline in five years, indicates Reuters. According to the results of the month in the Stoxx 600, the agency notes, amid the historic jump in oil prices (Brent has added almost 60% since the beginning of March), only the energy sector has benefited - it is expected to add 14% in March, Reuters writes.

In addition to geopolitical tensions, European stocks in the first quarter of 2026 were also influenced by concerns about the impact that the development of AI could have on business, the agency recalls. Against this background, the Stoxx 600 index is expected to end the quarter with a decline of about 1.3%, Reuters notes.

European stock markets started March near record highs, but fell sharply amid the conflict in the Middle East, which disrupted oil supplies, raised energy prices and put pressure on expectations for economic growth and inflation rates. Consumer prices in the euro zone rose 2.5% on-year in March, according to Eurostat data. Bloomberg calculated that this is the maximum level since January 2025. Investors now put in their calculations two rate hikes by the European Central Bank (ECB) by the end of 2026, writes Reuters.

This article was AI-translated and verified by a human editor