The Iran war is affecting European market sentiment, with investors cutting exposure to eurozone-area stocks due to fears of flatlining growth and a stagflation shock. Oil prices have surged since the start of the conflict, with Brent crude rising more than 56% over the past month to almost $110 a barrel. The bank's survey also revealed that 21% of respondents remain overweight in European equities, lower than the 35% seen in February. While the majority of survey respondents (96%) regard an outright recession in Europe as off the table, 54% now expect European growth to flatline this year, a rise from 15% in February's survey. The percentage of respondents expecting stagflation has also surged, with 39% expecting European core inflation to be higher in a year.