Global Markets | European shares skid to four-month low as Middle East conflict intensifies

European shares fell to a four-month low on Monday, led by the defense sector, as a spike in ‌crude prices ⁠prompted investors ⁠to factor in potential inflation pressures with the Middle East conflict intensifying.

The pan-European STOXX 600 was down 1.6% at 564.13 points, ​as of 0808 GMT, having logged its third consecutive weekly loss on Friday.

All sectors were in the ​red, with industrials being the biggest ⁠drag in ‌the benchmark index, as markets ​took a ​hit after Iran threatened to attack Israeli ⁠power plants and facilities supplying U.S. bases in ​the Gulf if U.S. President Donald ​Trump carries out his threat to "obliterate" Iran's power network.


Europe's benchmark STOXX now lags the U.S. benchmark S&P 500 as the region is highly dependent on oil imports via the Strait of Hormuz. The ‌index has dropped roughly 11% so far this month.

The waterway's closure has reignited inflation concerns, leading investors to now ⁠price in at least two 25-basis-point rate hikes by the European Central Bank this year, according to data compiled by LSEG, up from zero earlier in the year.

Shares of Delivery Hero advanced 2.8% after the German company sold its food delivery business in Taiwan to Grab Holdings for $600 million.