European markets started the week on a cautious note, slipping into negative territory on Monday as investors reacted to the escalating conflict involving Iran. Now entering its fifth week, the war is beginning to weigh heavily on global financial sentiment, with traders closely monitoring geopolitical developments and their potential economic fallout.
The pan-European Stoxx 600 index fell by 0.3% at the opening bell, with major sectors such as banking, industrials, autos, and financial services all recording losses. The downturn reflects a broader sense of unease across markets, as uncertainty continues to dominate investor decision-making.
This negative momentum follows a similar trend in Asia-Pacific markets overnight, signaling a widespread global reaction. Market participants are increasingly concerned about how the intensifying conflict could disrupt oil supply chains and slow economic growth, particularly as fresh developments emerged over the weekend.
Tensions escalated further after U.S. President Donald Trump suggested the possibility of seizing Iran’s key oil export hub, Kharg Island. At the same time, Yemen’s Houthi group claimed responsibility for launching ballistic missiles at Israeli military targets, marking a significant expansion of the conflict. These developments have heightened fears of a broader regional war.
Oil prices responded quickly to the uncertainty, with West Texas Intermediate crude rising by 2.58% to $102.19 per barrel in early trading. In response to the growing crisis, G7 leaders are set to hold an emergency virtual meeting to assess the situation. Investors are also keeping an eye on upcoming economic data, including EU sentiment reports and Germany’s latest inflation figures, for further clues on market direction.
source: cnbc