On January 2, 2026 in London, England, people visit the observation deck in Greenwich Park on a sunny but cold day with a view of Canary Wharf financial district in the distance.
Henry Nichols AFP | Getty Images
European stock markets reversed a strong start to close lower on Friday as oil prices resumed their rise as wars in the Middle East continued.
pan-european Stocks 600 Most major exchanges and nearly every sector closed in negative territory, ending the day down 1%.
Capital markets are coming off a volatile week in which assets fell across the board following the outbreak of war between the United States and Iran.
European listed stocks ended sharply lower on Thursday as uncertainty over the Middle East conflict lingered, overturning brief optimism that regional stocks would regain lost ground on Wednesday.
The pan-European stock index Stoxx 600 is expected to fall 4.6% this week, its biggest decline since April last year, when market concerns about the U.S.-China trade war were at their peak.
Oil prices rose again on Friday, with global benchmark Brent crude rising more than 6% to above $91 per barrel for the first time since April 2024. US West Texas Intermediate crude oil last rose 10% to above $89.
crude oil price
This comes after the United States granted India, the world’s third-largest oil importer, a 30-day exemption to resume purchasing Russian crude oil. The US government had previously imposed a 25% “penalty” tariff on India on purchases of Russian crude oil, but it was lifted last month.
US President Donald Trump said on Friday that there is no deal to end the war with Iran short of an “unconditional surrender” by Iran as the conflict enters its seventh day.
“Then, and after a great and acceptable leader is elected, we and our many wonderful and courageous allies and partners will work tirelessly to bring Iran back from the brink of destruction and make it economically bigger, better, and stronger than ever before,” President Trump said in a post on Truth Social.
Secretary of Defense Pete Hegseth said at a press conference Thursday that the United States is “just beginning the fight.”
“Iran is hoping that we can’t sustain this, but this is a really terrible miscalculation,” he told reporters. “There’s no lack of American will here…If you think you’ve seen something, wait a minute. The amount of combat power we can project into Iran, which is flowing and is coming, is several times what we have now, when you add up our capabilities and the capabilities of the Israel Defense Forces.”
Among European individual stocks, Swedish medical technology company Sektra jumped nearly 14% to top the Stoxx 600 after net sales rose 8% to $272 million and operating profit rose 21% to $54 million in the nine months from May 2025 to January 2026.
German defense team name Lenk rose 7%, partially recouping losses from the previous session. ITV It added 7% following reports that the British broadcaster was in talks with Sky over a potential sale of its TV business.
Asian stocks rose on Friday, while U.S. stocks fell, adding to the week’s decline.
