Stock markets: Europe set for a weak start amid tensions over oil and AI. The Kospi plummets (-5.7 per cent) - Il Sole 24 ORE

European stock indices are expected to open lower, pressured by a confluence of geopolitical and sector-specific concerns. The primary overhang is rising tension over oil supplies, which threatens to reignite inflationary pressures and complicate the outlook for central bank policy. Simultaneously, investor sentiment is being tested by fresh anxieties within the artificial intelligence sector, a pillar of recent equity market gains. The severity of the risk-off mood is most visible in Asia, where South Korea’s Kospi index has plunged 5.7 per cent, reflecting acute sensitivity to these global shifts.

From a market perspective, this combination is particularly challenging. Higher energy costs squeeze corporate margins, while AI-related volatility undermines the high-growth earnings narrative that has driven indices recently. The Kospi’s outsized move may amplify caution, as it often serves as a barometer for global tech supply chains. Going forward, traders will likely monitor oil price headlines and any guidance from major AI firms or their key suppliers. The key variable remains whether these tensions prove transient or signal a broader repricing of risk.