[MARKET ANALYSIS] Global equities fall amid higher energy prices as an Iranian official threatens of wider escalation

European bourses (STOXX 600 -0.6%) opened entirely in the red and has come under a fresh leg of pressure in recent trade amid the upside across the energy space. The source of the move came amid comments by the Senior adviser to Iran’s Supreme Leader Major General Safavi, saying the US conflict could expand further into the Indian Ocean. Focus on Wednesday were on comments by the Iranian President, in which he told the UN that the Strait of Hormuz cannot remain freely accessible while sanctions are in place. This does point to limited prospects of any relief. Sectors highlight the negative bias. Energy, Food, Beverages & Tobacco and Optimised Personal Care are the only sectors in the green. Leading the downside is Tech, followed by Autos and Financial Services. Key movers include: H&M (-3.1%), Q3 operating profit beat estimates while the CEO sees further potential to increase sales going forward, however sales only slightly beat forecasts; Shelly Group (+4.2%), to be acquired by Schneider Electric at EUR 70/shr; Energa (+37%), as Orlen approves a squeeze-out of all remaining shares at PLN 27.60/shr; MTU Aero Engines (-0.1%), upgraded to Buy from Sell at Citi. US equity futures have extended on Wednesday's losses, following the broader equity space as sentiment continues to sour. The Trump-Xi meeting will be one to watch on today's calendar, following US Treasury Secretary Bessent's announcement of a two-month extension to the trade truce.