European stocks dropped for a third day as intensifying conflict in the Middle East sent oil prices soaring to about $100 a barrel, reigniting fears that inflation could curb economic growth.
Meanwhile, Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader, signalling that hardliners remain firmly in charge in Tehran.
Dublin
The Irish index of shares fell 0.7 per cent on Monday, with gains in financial stocks failing to outweigh declines in market heavyweights.
Banking stocks rose, with AIB gaining 2 per cent and Bank of Ireland seeing more muted gains at 0.26 per cent. PTSB bucked the trend, falling 1 per cent, while insurer FBD was flat.
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Food groups Glanbia and Kerry both ended the session in negative territory, with the former down 1 per cent and the latter 0.36 per cent off the pace.
Construction stocks were also negative, with insulation specialist Kingspan falling 1.6 per cent and home builders Glenveagh and Cairn ending the day down 1 per cent and 2 per cent respectively. Ryanair also saw its shares fall, shedding 2.56 per cent.
London
The blue-chip FTSE 100 slipped 0.3 per cent, while the mid-cap FTSE 250 lost 1.8 per cent. Both indexes dropped for the third straight day.
The benchmark index has now fallen about 7 per cent from its record high hit on February 27 as tensions escalated in the Middle East.
Shares of oil majors rose, with Shell firming 2.4 per cent and BP up 2.2 per cent, tracking crude prices that hit their highest since 2022, briefly breaking above $119 a barrel on concerns over prolonged shipping and supply disruptions stemming from the widening conflict.
The UK’s energy index gained 2.3 per cent.
Soaring energy prices have renewed inflation worries and prompted a sharp pullback from February when two Bank of England rate cuts were priced in.
Money markets largely expect the Bank of England to leave interest rates unchanged for the rest of the year as the war drives up energy costs and raises the spectre of another inflation wave.
Traders were also weighing the potential costs of fresh government support for energy bills after Prime Minister Keir Starmer said easing the cost-of-living strain was at the top of his mind.
Any new support would further strain public finances and erode the buffer the government has to protect its fiscal rules.
British borrowing costs surged sharply, while sterling tumbled on Monday.
Europe
The Stoxx Europe 600 Index was down 0.6 per cent at the close. Miners, real estate, autos, retail as well as travel and leisure stocks led the losses. The energy sector outperformed, with oil majors like Shell and BP up 2.5 per cent and 2.2 per cent, respectively.
Airlines shares declined, with Lufthansa dropping 6.4 per cent. Richemont was down 3.3 per cent as luxury stocks came under pressure amid concerns about weakening consumer demand.
In individual stocks, Roche fell 2.6 per cent after a study of its experimental breast-cancer drug in combination with another treatment failed to meet the trial’s main goal.
New York
The war in the Middle East sparked a fresh bout of volatility in markets, with stocks paring losses as a surge in energy prices faded after oil topped $100.
While the S&P 500 trimmed most of a 1.5 per cent drop, nearly 400 of its shares fell. Chipmakers climbed during the session.
The yield on 10-year Treasuries slid one basis point to 4.13 per cent. Bitcoin topped $69,000, with some advocates once again touting the digital asset as a potential inflation hedge. – Additional reporting: Reuters, Bloomberg
