European markets dip as investors eye earnings, Iran conflict continues to weigh (updated)

adidas AG

29/04/2026 09:48

Earnings mixed. Healthcare stocks drag, Adidas outperforming

Pernod Ricard drops after ending merger talks

Kone agrees 29.4 billion euro deal to buy German rival TKE

German inflation rises, euro zone sentiment hits 3.5-year low

Updates after market close

By Twesha Dikshit and Avinash  P

April 29 (Reuters) - European shares slid to a three-week low on Wednesday amid mixed corporate results and data pointing to the economic damage caused by the Iran war, with investors cautious ahead of key global monetary policy decisions.

The pan-European STOXX 600 .STOXX closed down 0.6% at 602.96 points.

GSK GSK.L and AstraZeneca AZN.L fell 5.4% and 1.5%, respectively despite posting strong first-quarter earnings. Their declines dragged the healthcare index .SXDP down 1.7%, making it the biggest drag on the STOXX 600.

"European companies are reporting okay numbers and some of them are ahead of expectations, but the market is not really rewarding them for that (due to the) underlying macro headwinds," said Marija Veitmane, head of equity research at State Street.

European equities are nearly 5% below pre-war levels, lagging U.S. peers and global markets, as the region's reliance on energy imports has intensified inflation pressures and weighed on sentiment.

Data on Wednesday showed German inflation rose in April due to surging energy prices, while euro zone economic sentiment fell  to a three-and-a-half-year low this month amid the Iran war.

U.S. President Donald Trump said he was unhappy with Tehran's latest proposal to end the conflict, adding uncertainty over prospects for negotiations.

Most major regional bourses also fell. Germany's DAX GDAXI closed lower for an eighth straight session, its longest losing streak since 2020.

Wall Street slipped ahead of earnings from several U.S. Big Tech firms and a Federal Reserve policy decision, as investors looked for signs that heavy AI spending is translating into earnings growth.

ECB, EARNINGS DELUGE

Focus now turns to the European Central Bank's meeting on Thursday, where policymakers are widely expected to keep rates on hold. Markets will scrutinise guidance as officials seek to curb inflation while managing weak growth.

"The U.S. has continued to show remarkable resilience .... Europe, on the other hand, has been showing weaker growth dynamics," said Daniela Hathorn, senior market analyst at Capital.com.

Investors sifted through a wave of earnings to assess the war's impact on corporate Europe.

UBS UBSG.S gained 3.2% after the Swiss bank posted better-than-expected first-quarter net profit, while Deutsche Bank DBKGn.DE fell 1.8% after its results. The euro zone banks index .SX7E slipped 0.3%.

Adidas ADSGn.DE jumped 8.4% after the German sportswear group reported better-than-expected first-quarter operating profit.

Elsewhere, Pernod Ricard PERP.PA fell 3.1% after the French spirits maker ended merger talks with Jack Daniel's owner Brown-Forman BFb.N.

Finnish lift maker Kone KNEBV.HE slipped 3.3% after agreeing to buy German rival TK Elevator in a 29.4-billion-euro ($34.4 billion) deal. Thyssenkrupp TKAG.DE, which owns a 16.2% stake in TK Elevator, surged nearly 10%.

 (Reporting by Twesha Dikshit and Avinash P in Bengaluru. Editing by Rashmi Aich and Mark Potter)

 ((Twesha.Dikshit@thomsonreuters.com;))