European Stocks Close Tuesday in Red

(MENAFN) European equities closed firmly in the red on Tuesday, as a deepening political crisis gripping Britain and fading prospects for an end to the U.S.-Iran war rattled investor confidence across the continent.

Broad-Based Selloff Hits Major Bourses
The pan-European Stoxx Europe 600 benchmark retreated 1.01%, settling at 606.63 as the majority of major indices and sectors finished the session in negative territory.

Germany's DAX 40 led regional losses, shedding 1.62% to close at 23,954.93. Spain's IBEX 35 followed, falling 1.56% to 17,573.60, while Italy's FTSE MIB declined 1.36% to 48,990.98. France's CAC 40 gave up 0.95% to end at 7,979.92. The UK's FTSE 100 proved the most resilient, slipping just 0.04% to 10,265.32 — though domestic assets told a far more turbulent story.

Starmer Under Fire as Political Crisis Mounts
Sentiment across European markets was rattled first and foremost by an accelerating political emergency in Britain, where Prime Minister Keir Starmer faced a mounting chorus of resignation demands from within his own Labour Party ranks — including sitting lawmakers and senior government officials — following a bruising performance in last week's local elections.

Starmer addressed his Cabinet directly on Tuesday, declaring he would not step aside and intended to continue governing. He noted that Labour's formal leadership challenge mechanism had not yet been formally activated, signaling he remains in control — for now.

Financial markets moved swiftly to price in the uncertainty. The yield on the benchmark UK 10-year gilt climbed to approximately 5.10%, reflecting heightened risk perception around British sovereign debt. The pound bore the brunt of the pressure, sliding 0.7% against the U.S. dollar and 0.3% against the euro.

Iran War Uncertainty Adds to the Gloom
Compounding the political turbulence, traders were also rattled by renewed fears over the trajectory of the U.S.-Iran conflict. U.S. President Donald Trump declared on Monday that a ceasefire was "on life support," after Tehran submitted what Washington characterized as an "unacceptable" counter-offer to its proposal for a permanent end to hostilities.

Trump's comments sent oil prices higher, amplifying concerns that an unresolved geopolitical standoff could keep inflationary pressures stubborn and cast a shadow over the global growth outlook in the months ahead.

Bayer Bucks the Trend With Strong Quarterly Results
Not all corporate news was bleak. German pharmaceutical and chemicals giant Bayer surged more than 4% after delivering a better-than-anticipated first-quarter adjusted operating profit of €4.5 billion — equivalent to approximately $5.3 billion — a 9% improvement year-on-year. The company also reaffirmed its full-year financial guidance, offering investors a rare note of reassurance amid the broader market turbulence.

Bayer's advance came even as markets continued to monitor the company's exposure to long-running litigation tied to Roundup, the widely used herbicide brand it inherited through its landmark $63 billion acquisition of Monsanto in 2018.

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