Key facts
- Europe's STOXX 600 index fell 0.7% to 618.42 points.
- Major regional indexes in Frankfurt, Paris, and London also traded lower.
- Crude oil prices jumped over 4% following exchanges of fire between Israel and Iran.
- Airlines like Lufthansa and Air France slipped about 2% each.
- Monte dei Paschi di Siena shares gained 10.7% on a €30.6 billion bid from Intesa Sanpaolo.
- Intesa Sanpaolo shares fell 4.1% on the news of its bid.
- European tech shares experienced declines, with ASM International down 1.8%.
Europe's STOXX 600 share index fell to a two-week low on Monday, influenced by escalating Middle East tensions and a global selloff in AI stocks. The pan-European index slipped 0.7% to 618.42 points by 0828 GMT, with major regional indexes in Frankfurt, Paris, and London also trading lower.
Crude oil prices surged over 4% following exchanges of fire between Israel and Iran, raising concerns about regional stability. This led to losses in energy-sensitive sectors, with airlines like Lufthansa and Air France declining approximately 2% each.
The Italian banking sector was a focal point, as Monte dei Paschi di Siena shares jumped 10.7% following an unsolicited cash-and-share bid valued at €30.6 billion ($35 billion) from rival Intesa Sanpaolo. Intesa Sanpaolo's shares fell 4.1% on the news.
Globally, the tech sector experienced sharp losses, mirroring declines seen in the U.S. and Asia. European tech shares saw companies like ASM International slip 1.8%, while AI equipment makers Legrand and Schneider Electric dipped over 1%.
Market participants are awaiting the European Central Bank's rate decision on Thursday, with a 25-basis-point hike largely priced in. Resilient U.S. jobs data has led investors to anticipate hawkish policy from the Federal Reserve.