Most stock indices in the largest Western European countries ended Friday's trading in negative territory due to tensions in the Middle East.

The exception was the UK's FTSE 100 index, which rose 0.27% on news that former Manchester mayor Andy Burnham had officially become the new leader of the British Labour Party. On Monday, July 20, the country's prime minister, Keir Starmer, will officially resign, and King Charles III will ask Burnham to form a new government.

The Stoxx Europe 600 index of the largest European companies fell 0.34% to 641.53 points.

Germany's DAX lost 0.34%, France's CAC 40 fell 0.47%, Italy's FTSE MIB declined 0.94%, and Spain's IBEX 35 dropped 0.45%.

Additional pressure on global markets came from investors pulling money out of semiconductor stocks amid concerns about their inflated valuations following the rally earlier this year. Even strong forecasts from industry leaders, including the Netherlands' ASML and Taiwan's TSMC, failed to improve the situation.

ASML shares fell 3.8% on Friday, Infineon Technologies lost 1.6%, while ASM International and STMicroelectronics each dropped 4%.

Burberry shares plunged 6.4%. The British luxury goods maker increased revenue by 5% in the first financial quarter, which ended June 27. However, the company said that the conflict in the Middle East had negatively affected tourist spending in Europe.

The market value of other luxury sector companies also declined, including LVMH and Christian Dior, down 1.6%, Kering, down 1.2%, and Hermes, down 1.5%.

Dassault Systemes shares fell 2.1%. The French software developer is in talks to acquire ArisGlobal, which makes software for clinical drug trials, from Nordic Capital for about $2 billion.

Bank shares also declined: Deutsche Bank by 2.7%, Commerzbank by 3.1%, Barclays by 1.5%, and Unicredit by 2.5%.

Volvo Cars' market capitalization collapsed by nearly 11%. The Swedish automaker posted a small net profit in the second quarter of 2026, while cutting operating profit and revenue due to lower car sales.

At the same time, Saab shares rose 9.7%. The Swedish defense contractor increased operating profit in the second quarter more than forecast thanks to strong demand in key markets.

Shares of oil producers rose in line with oil prices: TotalEnergies by 1.3%, BP Plc by 1.4%, and Shell by 2.4%.

It was also reported on Friday that consumer prices in the eurozone increased by 2.8% year-on-year in June. Inflation slowed compared with the previous month, when it stood at 3.2%. These are final data, matching both the preliminary estimate and the consensus forecast of analysts surveyed by Trading Economics.

The Bank of Italy improved its forecast for the country's economic growth this year to 0.6% from the previously expected 0.5% after strong expansion in the first quarter.