Global Market: European shares slip as oil surge fuels inflation fears; Novartis plunges

European shares edged lower on Tuesday as rising oil prices heightened inflation concerns and renewed fears over energy supplies amid escalating tensions in the Middle East, according to a report by Reuters.

The pan-European STOXX 600 fell 0.2% to 648.41 points by 0705 GMT. Germany’s DAX declined 0.3%, while France’s CAC 40 slipped 0.4%. London’s FTSE 100 was broadly flat after European markets had a relatively subdued session on Monday due to a U.S. public holiday, the report stated.

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Oil prices rose sharply, with Brent crude futures trading around $98.50 a barrel. The increase came after Iran threatened to retaliate against any further attacks by targeting energy infrastructure across the Gulf, including U.S. oil and gas interests, the report stated.

Higher energy prices have renewed concerns that a prolonged conflict could intensify inflationary pressures, potentially complicating the outlook for interest-rate cuts by major central banks.

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Novartis tumbles after second drug setback

Novartis shares plunged 8.8%, making the Swiss drugmaker one of the biggest decliners in European markets. The company said late-stage testing of del-desiran, an experimental treatment for myotonic dystrophy, failed to meet its primary endpoint.

The setback came just a day after Novartis reported disappointing results from a late-stage trial of pelacarsen, its experimental cholesterol-lowering drug. The back-to-back failures have raised concerns over the company’s drug development pipeline and future growth prospects.

Sandoz gains on long-term growth target

Sandoz shares rose 2.9% after the Swiss generic and biosimilar drugmaker outlined an ambitious long-term growth strategy. The company said it aims to more than double net sales between 2025 and 2035.

Elsewhere, Poste Italiane shares edged down 0.2% after the Italian postal group sweetened its takeover offer for Telecom Italia as it seeks to secure control of the former telecommunications monopoly.

European markets remained sensitive to developments in the Middle East, with investors weighing the potential impact of higher oil prices on inflation, corporate costs and the path of monetary policy across the region.