BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks fell sharply to hit a two-month low on Monday as investors braced for a prolonged conflict in the Middle East that could send energy costs even higher, risking inflation and regional economic growth.
Brent crude futures last traded up 15 percent at $107 a barrel after surging to a nearly four-year high above $119 a barrel earlier.
Tensions in the Gulf escalated following reports of explosions at Al Udeid Air Base, the largest United States military installation in the Middle East.
Bahrain's state oil company has declared force majeure on its shipments after Iranian strikes in the region set the largest oil facility on fire.
Investors were also reacting to weak economic data from Germany. German industrial production posted an unexpected monthly fall of 0.5 percent in January, following a 1.0 percent decrease in December, Destatis reported. Output was expected to climb 1.0 percent.
At the same time, factory orders plunged 11.1 percent in January, reversing last month's 6.4 percent growth. Economists had forecast a moderate decline of 4.2 percent.
The pan-European Stoxx 600 was down 2.1 percent at 586.25 after closing 1 percent lower on Friday.
The German DAX tumbled 2.4 percent, France's CAC 40 shed 2.5 percent and the U.K.'s FTSE 100 was down 1.5 percent.
Banks led losses, with Commerzbank, Deutsche Bank, BNP Paribas and Barclays falling 3-5 percent.
Airline stocks were coming under selling pressure, with Lufthansa and Air France KLM losing around 5 percent each.
GSK fell 1.1 percent in London after announcing a licensing agreement with Italian pharmaceutical company Alfasigma S.p.A.
Education company Pearson edged up slightly after announcing updates to its £350 million share buyback program.
Shipping services firm Clarkson added nearly 2 percent despite reporting a fall in profits for 2025 amid 'extraordinary geopolitical and economic complexity'.
Global technology major ABB slumped 4.6 percent after an announcement that it will invest approximately $7.5 crore in India in 2026.
Engineering group SKF plunged 4 percent after it has signed an agreement to acquire G-Tech Instruments Inc.
Copyright(c) 2026 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2026 AFX News
