European Stocks Face Second Weekly Decline Amid Iran Conflict Concerns

European stock markets are poised for a second consecutive weekly decline as the ongoing conflict in Iran raises concerns about rising inflation and slowing economic growth. According to Jin10, worries about private credit are also quietly escalating. Mining stocks are leading the decline, with bank stocks also underperforming. Since the beginning of the year, European stocks have outperformed U.S. stocks, driven by optimistic expectations of increased fiscal spending and lower interest rates. However, this trend has been hampered in March due to fears that the Iran conflict could lead to a stagflation shock. Data from EPFR Global, cited by Bank of America, shows that European equity funds experienced a $200 million outflow in the week ending Wednesday, marking the first net outflow in six weeks. Rhynhardt Roodt, Chief Investment Officer of Equities at Ninety One, stated, "The market is pricing in the risk of a prolonged conflict, which will have a greater impact on Europe than the U.S. If oil prices remain above $100, current inflation expectations may still be underestimated; the longer the conflict drags on, the more concerned I become about the stock market."