Despite edging higher in the earlier part of the session, European stock markets declined Wednesday as investors digested more corporate results as well as escalating geopolitical tensions and higher-than-expected UK inflation data.

Germany’s DAX index fell 0.26%, France’s CAC 40 declined 0.43%, and the UK’s FTSE 100 dropped 0.17%.

Initially, European indices bounced Wednesday, but safe-haven bids arose once again as investors monitored ongoing developments around the Ukraine-Russia conflict.

Geopolitical tensions in spotlight

Global markets had stumbled on Tuesday on heightened tensions between Russia and Ukraine.

Russia’s revised nuclear doctrine and Ukraine’s deployment of U.S.-supplied long-range ballistic missiles targeting Russian territory have significantly raised the stakes in the ongoing conflict, fueling concerns about broader instability in the region.

Earlier Wednesday, the US embassy in Kyiv was closed earlier Wednesday after a warning of a possible strike. It was also reported that Ukraine had fired British-French-made Storm Shadow missiles at targets in Russia.

Severn Trent reports profit growth

In corporate news, Severn Trent (LON:SVT) stock rose 1.2% after the British water provider reported an increase in first-half profits on Wednesday, driven by reduced costs and higher customer bills.

Sage Group (LON:SGE) stock soared 17.9% after the software company on the back of strong full-year 2024 results, which exceeded market expectations in key metrics, and a confident outlook for fiscal year 2025. 

STMicroelectronics (EPA:STMPA) stock fell 1% after the computer chip maker pushed back its long-term financial targets following three guidance cuts this year, anticipating a slump in demand for industrial and automotive chips will persist into 2025.