European stocks fell on Monday as global investors assessed developments in the Middle East.
The European Stoxx 600 index fell 0.6% to 610.63 points, with most sectors declining except for oil and gas.
The UK's FTSE 100 index fell 0.4% to 10,553.15 points, with the presence of major energy companies helping to limit losses compared to other European markets. Germany's DAX index also declined by about 1% to 23,564.27 points, while France's CAC 40 index dropped by more than 0.9% to 8,181.70 points.
Shares in the travel and leisure sector were among the hardest hit, falling by about 2% at the start of trading, with airline stocks Wizz Air, EasyJet and Lufthansa declining by 7.2%, 3.9% and 3.8% respectively.
This performance coincided with a decline in Asia-Pacific markets, as investors reacted to US plans to impose a blockade on the Strait of Hormuz. This development came after weekend talks between Washington and Tehran failed to produce an agreement to end the conflict in the Middle East.
US President Donald Trump said in a post on his platform “Truth Social” that the US Navy will immediately begin the process of preventing all ships from entering or leaving the Strait of Hormuz, adding that the blockade measures will begin soon and that other countries will participate in it, while stressing that Iran will not be allowed to benefit from what he described as “illegal extortion.”
Early on Monday, Trump indicated that the ban on ships entering or leaving Iranian ports would begin at 10:00 a.m. Eastern Time (3:00 p.m. London time).
The stalled negotiations between the United States and Iran have renewed fears of a protracted conflict, pushing crude oil prices higher in Sunday's trading.
Investors in Europe are also watching developments in Hungary's political landscape after long-serving conservative leader Viktor Orban conceded defeat to Peter Magyar, following a landslide victory for the pro-EU Tesa party, a blow described as unfavorable to both Russia and the US administration.
On the corporate side, results from LVMH, Christian Dior, and Galp Energy are due on Monday, while no major economic data is scheduled for the day.
