European shares experienced a downturn on Friday, with the pan-European STOXX 600 index declining 0.5% to 611.04 points. This drop positions the index for a 2.5% loss over the week, following four consecutive weeks of gains. Investor sentiment remains shaky due to ongoing tensions in the Middle East, where the conflict has now extended to approximately eight weeks without resolution. Despite a recent ceasefire extension between Israel and Lebanon, concerns persist regarding the lack of progress in broader negotiations involving Iran. The energy market is also feeling the strain, with benchmark Brent crude oil prices hovering above $100 per barrel, exacerbating worries over inflation and energy supply disruptions. Most sectors traded negatively, particularly aerospace and defense, which fell 2.4%. In contrast, the technology sector stood out with a 0.7% increase, buoyed by a 5.5% jump in SAP shares following strong growth in its cloud business. While European corporate earnings have shown resilience, the escalating risks tied to the Middle East conflict and surging oil prices continue to cloud the economic outlook.