European equity markets retreated on Thursday, dragged down by a sharp rise in oil prices that sparked concerns over inflationary pressure and corporate margins.
The pan-European Stoxx 600 index fell 1.3% in the session, marking a reversal from the solid gains posted earlier in the week.
Amid the broad-based sell-off, the defense sector stood out as a rare bright spot.
Defense shares rallied, bucking the negative sentiment that enveloped most other market segments.
Investors rotated into the group, likely viewing it as a hedge against geopolitical uncertainty that often accompanies energy market volatility.
The market's reaction underscores the persistent sensitivity of European equities to energy costs.