European equities moved sharply lower on Monday as escalating conflict in the Middle East weakened investor sentiment and prompted a shift away from risk-sensitive assets.
Concerns about inflation resurfaced after Brent crude prices surged nearly 10%, reaching their highest levels since January 2025 amid fears that regional instability could disrupt global oil supplies.
Market participants are closely monitoring developments around the Strait of Hormuz, a vital shipping route responsible for a significant share of worldwide oil transportation.
On the economic front, fresh data showed German retail sales declined more than anticipated in January, while UK house prices rose slightly faster than expected in February following a late-2025 slowdown.
Major European indices posted broad declines, with Germany’s DAX falling 2.6%, France’s CAC 40 dropping 2.2%, and the UK’s FTSE 100 retreating 1.5%.
Banking stocks were among the worst performers, as Commerzbank (TG:CBK), Deutsche Bank (TG:DBK), BNP Paribas (EU:BNP) and Barclays (LSE:BARC) all recorded notable losses amid renewed concerns about transparency in private lending markets.
UK engineering group Senior (LSE:SNR) also traded lower after reporting 2025 revenue that fell short of market expectations.
Medical technology company Smith & Nephew (LSE:SN.) declined sharply despite announcing improved profit and cash flow figures for 2025.
In contrast, Bunzl (LSE:BNZL) gained ground after the distribution group reported 3.0% revenue growth at constant exchange rates for 2025, supported by acquisitions.
Shares in Sage Group (LSE:SGE) edged higher after the software firm announced plans to launch a share buyback programme worth up to £300 million.
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