European Markets Fall As Middle East Tensions Escalate

(RTTNews) - Most of the markets across Europe settled notably lower on Monday as stocks tumbled amid rising tensions in the Middle East, where tensions run high following the U.S. and Israel's coordinated strikes on Iran and the retaliatory strikes by Teheran on U.S. bases across the region.

Also, inflation worries have resurfaced as Brent crude prices soared over 10% to their highest level since January 2025 on fears of supply disruptions from the Middle East.

Today Israel launched airstrikes on Hezbollah targets in Beirut and other parts of Lebanon following projectile fire from Lebanese territory into northern Israel.

U.S. President Donald Trump suggested the conflict with Iran could go on for the next four weeks, raising concerns about a significant widening of hostilities in the region that could severely disrupt the global supply of crude oil and send prices soaring to levels not seen in years.

Shares from banking, luxury, leisure and automobile sectors were among the major losers, while defense stocks found support. Energy stocks gained as oil prices jumped.

The pan European Stoxx 600 fell 1.61%. The U.K.'s FTSE 100 ended down by 1.2%, Germany's DAX lost 2.56% and France's CAC 40 slid 2.17%, while Switzerland's SMI closed down by 1.29%.

Among other markets in Europe, Austria, Belgium, Greece, Iceland, Ireland, Netherlands, Poland, Spain, Sweden and Türkiye ended with sharp to moderate losses.

Finland settled modestly lower, while Czech Republic, Denmark and Portugal edged down marginally. Norway and Russia moved higher.

In the UK market, IAG, Standard Chartered, JD Sports Fashion, Hikma Pharmaceuticals, Burberry Group, HSBC Holdings, Informa, Intercontinental Hotels Group and Mondi lost 4 to 5.6%.

Smith & Nephew ended down by about 4.3% despite reporting higher profits and cash flow for 2025.

Barclays, Associated British Foods, Easyjet, Marks & Spencer, Natwest Group, Lloyds Banking Group, Anglo American Plc, Antofagasta, Fresnillo and Unilever also declined sharply.

BAE Systems climbed more than 6%. Airtel Africa gained 3.2%. Bunzl moved up 2.35% after the business supplies distributor reported 3% revenue growth at constant exchange rates in 2025, driven by acquisitions.

The Sage Group gained about 2.2%. The software company said that it is launching a share repurchase program to repurchase up to GBP 300 million.

BP and Shell closed up by 2.15% and 1.9%, respectively. Beazley, Babcock International and Rolls-Royce Holdings also posted strong gains.

In the German market, BMW, Volkswagen, Zalando, Adidas, Continental, Mercedes-Benz, Commerzbank, Siemens, Heidelberg Materials, Deutsche Bank, Vonovia, Bayer, Henkel, Allianz, Porsche Automobil Holding, Infineon, Beiersdorf, MTU Aero Engines and BASF fell 2%-5%.

In the French market, Accor dropped more than 8%. Stellantis fell by about 7%. Renault, Kering, Michelin, Saint-Gobain, LVMH, L'Oreal, Hermes International, BNP Paribas, Societe Generale, Capgemini, Legrand, Credit Agricole and EssilorLuxottica lost 2%-5.5%.

TotalEnergies climbed more than 3.5%. Edenred and Thales settled marginally up.

Data from S&P Global showed the S&P Global UK Manufacturing PMI was revised slightly lower to 51.7 in February 2026 from a preliminary of 52, and compared to a 17-month high of 51.8 in January. The reading continued to point to expansion in the manufacturing sector, with output growth reaching the highest in 17 months.

UK mortgage approvals declined to a two-year low in January, while consumer credit logged a faster increase, data from the Bank of England showed Monday.

Net mortgage approvals for house purchases decreased unexpectedly to 59,999 in January from 61,007 in December. The number was forecast to rise to 62,000.

Data from mortgage lender Nationwide Building Society said UK house prices grew at a steady pace in February, reflecting a moderate recovery from a fall at the end of the last year.

House prices posted an annual increase of 1% in February, the same rate of growth as seen in January, the data showed. The rate was faster than the expected growth of 0.7%.

On a monthly basis, house prices logged a steady growth of 0.3% in February.

The euro area manufacturing activity registered its strongest growth in almost four years in February, underpinned by renewed increase in new orders and production, final data from S&P Global showed.

The HCOB final manufacturing Purchasing Managers' Index rose to 50.8 in February from 49.5 in the previous month. The reading matched the flash estimate.

Among big four economies, Germany returned to growth for the first time in over three-and-a-half years. The headline HCOB factory PMI advanced to 50.9 from 49.1 in the prior month. The flash score was 50.7.

Growth in the French manufacturing sector moderated from January's 43-month high. The final factory PMI dropped to 50.1 in February from 51.2 in the previous month. The reading was slightly above the initial estimate of 49.9.

Germany's retail sales declined unexpectedly in January, data from Destatis showed. Retail sales decreased 0.9% month-on-month in January, in contrast to the revised 1.2% increase in December. Sales were expected to remain flat.

On a yearly basis, growth in retail sales eased to 1.2% from 2.5% in December. In nominal terms, retail sales remained flat on a monthly basis and increased 2.5% from the previous year.