LONDON, March 23, 2026, 22:43 GMT
Investors pulled money from European exchange-traded funds on Monday, with outflows hitting both bond and financial stock ETFs amid anxiety that the war with Iran could keep energy prices high. According to Morningstar Direct data reported by ETF Stream, Europe-based fixed-income ETFs had lost $675 million by March 18, while financial-sector ETFs were down $3.2 billion. Those withdrawals came despite a late-session market bounce after U.S. President Donald Trump delayed U.S. strikes on Iranian power infrastructure for five days.
Rising fuel prices are pushing up household expenses and shaping Europe’s outlook for interest rates, sparking concerns about weaker growth and quicker inflation. Euro zone consumer confidence dropped to -16.3 in March after a reading of -12.3, according to the latest figures. “Household spending will decline and cause GDP to stagnate over the next two quarters,” Capital Economics’ Andrew Kenningham said. Reuters
Market sentiment is turning more defensive. Reuters said investors are shifting into cash, pulling out of bonds, tech, and mining. “Cash balances are going up,” RBC Capital Markets’ Karen Jorritsma told the outlet, describing it as a “fairly quick exit to the door.” Reuters
Monday brought another round of sharp swings. Brent tumbled 10.9% to close at $99.94 a barrel. Over in London, the FTSE 100 clawed back losses to end just 0.2% down, having sunk as much as 2.4% earlier. BP shares slid 2.2%, Shell gave up 4.2%—energy stocks falling as crude surrendered more of its war premium.
The physical market is still looking tight. According to Reuters, both European and U.S. gasoline shipments are making their way to Asia as buyers hunt for supply after Gulf disruptions. That scramble has pushed Asian gasoline cracks up to roughly $37 a barrel over Brent. IEA Executive Director Fatih Birol said more stock releases are under discussion, but cautioned: “A stock release will help to comfort the markets, but this is not the solution.” Reuters
Energy bosses aren’t mincing words. TotalEnergies CEO Patrick Pouyanne warned a disruption dragging past three or four months spells a “systemic risk” for the global economy. Shell’s integrated gas head Cedric Cremers flagged that the conflict might “send the wrong signals” on the reliability and price of gas in the long run. Reuters
The pullback shows up in global fund numbers as well. During the week ending March 18, global equity funds saw $20.3 billion flow out—the sharpest drop-off in about three months. European funds recorded $2.13 billion in outflows. Money market funds, on the other hand, attracted $32.57 billion, with investors favoring heftier cash positions, according to Reuters data.
Still, the bounce could prove short-lived. Iran shot down speculation of negotiations with the U.S. in the wake of Trump’s statement, while U.S. crude futures climbed $1.37 during early Asia hours, trading at 2206 GMT.
Goldman Sachs bumped up its Brent crude forecast for March-April to $110 a barrel on Sunday, adding that prices could blow past the 2008 high if the Strait of Hormuz faces a lengthy disruption. “Clinging to President Trump’s words is fraught with risks,” Wealth Club’s Susannah Streeter cautioned. “Hope is here, but uncertainties persist,” said Ipek Ozkardeskaya of Swissquote. Reuters
