Geopolitical Tensions Push European Stocks to Three-Month Low

Europe's main stock index fell to a three-month low amid geopolitical tensions, especially after Russia's updated nuclear doctrine warning. Investors shifted focus from risk assets to safe havens, causing a slump in key sectors like automobiles and banks. Meanwhile, market participants watch U.S. policy changes under President-elect Trump closely for further impact.

European stocks experienced a sharp decline on Tuesday, hitting a three-month low, largely driven by geopolitical challenges. The dip followed Russia's alarming warning about its revised nuclear doctrine, prompting investors to pivot towards safer assets.

The pan-European STOXX 600 recorded a 0.9% drop, marking the third consecutive day of losses. Safe-haven assets, such as gold and the U.S. dollar, saw an uptick as the Kremlin emphasized the inescapable nature of Russian retaliation in response to a potential attack.

As investor anxiety swept through the markets, Europe's fear gauge index spiked. Notably, the automobile and banking sectors each saw a 2% slump, exacerbating overall market declines. Meanwhile, stakeholders are attentive to upcoming policy directions in the United States with concerns over potential impacts on global economic growth.

(With inputs from agencies.)