European stock markets delivered mixed performance on Monday as Middle East tensions drove investors toward energy stocks while broader indices weakened. The FTSE 100 traded slightly higher despite risk-asset selloff triggered by Iran's announcement it closed the Strait of Hormuz 'until further notice' following a commercial vessel attack and US military strikes. Rising crude oil prices—with Brent and WTI both climbing more than 4%—lifted major energy stocks including Shell, BP, and TotalEnergies, while the pan-European STOXX 600 slipped around 0.2% amid renewed concerns over potential supply disruptions to global oil markets.
European Indices Record Mixed Monday Session
In early trading, the pan-European STOXX 600 slipped around 0.2%, while Germany's DAX fell 0.3% and France's CAC 40 lost 0.2%. London's FTSE 100 fluctuated between gains and losses throughout the session. Investor sentiment deteriorated after geopolitical uncertainty overshadowed recent optimism surrounding European equities. The latest decline reverses some of last week's recovery, when European markets were supported by hopes of diplomatic progress and continued strength in artificial intelligence-related technology stocks.
Iran Closes Strait of Hormuz Amid Escalating Tensions
The market selloff followed Iran's announcement that it once again closed the Strait of Hormuz 'until further notice' after an attack on a commercial vessel and subsequent US military strikes. US Central Command stated the vital shipping route is still open to lawful transit. Concerns over potential supply disruptions intensified across global markets as the geopolitical situation shifted investor focus toward inflation concerns and the potential economic impact of sustained higher energy prices.
Energy Stocks Gain on 4% Oil Price Surge
Oil prices reacted sharply, with Brent crude and West Texas Intermediate both climbing more than 4%. The surge boosted Europe's major energy producers, which helped offset some of the broader market weakness. Shares of Shell rose 0.9%, BP gained 2.1%, and TotalEnergies advanced 1.83% as investors anticipated stronger earnings from higher crude prices.
ECB's Schnabel Scheduled to Speak on Interest Rates
Investors will closely monitor remarks from European Central Bank Executive Board member Isabel Schnabel later in the day for further insight into the outlook for interest rates.
FAQ
What caused European stock markets to trade mixed on Monday?
European markets delivered mixed performance on Monday after Iran announced it closed the Strait of Hormuz 'until further notice' following a commercial vessel attack and US military strikes. The geopolitical escalation drove investors away from risk assets, causing the STOXX 600 to slip around 0.2%, Germany's DAX to fall 0.3%, and France's CAC 40 to lose 0.2%, while the FTSE 100 fluctuated between gains and losses.
Why did energy stocks rise despite broader market weakness?
Energy stocks gained as Brent crude and West Texas Intermediate both climbed more than 4% following Iran's closure of the Strait of Hormuz. Shell rose 0.9%, BP gained 2.1%, and TotalEnergies advanced 1.83% as investors anticipated stronger earnings from higher crude prices driven by concerns over potential supply disruptions to global oil markets.
