European stocks fall for second session as energy, ECB hike risks persist

European stocks closed sharply lower for a second session on Tuesday amid persistent concerns that tight financial conditions could hamper economic activity.

The Euro STOXX 50 fell 0.9% to 6,365 and the STOXX Europe 600 dropped 0.6% to 647.

The US and Iran exchanged more strikes and prolonged the outlook of suspended energy exports from the Persian Gulf, raising fuel prices and inflationary risks.

The elevated energy price backdrop had already lifted headline inflation in the Eurozone, per the latest data, consolidating the likelihood of an ECB hike this month.

SAP, Prosus, and Adyen dropped between 4% and 2.6%.

Industrials also closed lower with Siemens, Schneider, and Rheinmetall dropping around 2.5%.

On the other hand, Novartis surged 6.3% as its experimental multiple sclerosis pill succeeded in two late trials.