European Stocks Close Monday Down
The pan-European Stoxx Europe 600 index shed 1.61%, or 10.22 points, finishing the session at 623.63. Losses were broad and steep across the continent's major bourses: Germany's DAX 40 tumbled 2.56% to 24,638, Spain's IBEX 35 slid 2.64% to 17,875.80, France's CAC 40 dropped 2.17% to 8,394.32, Italy's FTSE MIB 30 fell 1.97% to 46,280.40, and the UK's FTSE 100 declined 1.20% to 10,780.11.
The selloff intensified after Saturday's U.S.-Israeli airstrikes on Tehran and other Iranian cities reportedly killed Supreme Leader Ayatollah Ali Khamenei alongside several senior Iranian officials. Tehran struck back with successive waves of drone and missile attacks targeting Israel and U.S. military installations across the region, deepening investor anxiety.
Energy markets reflected the turmoil acutely. European gas prices surged 35.5% on the day amid mounting fears over global supply disruptions. Energy equities rallied in tandem — Norway-based Var Energi climbed 6%, while Equinor soared 8% as traders priced in the prospect of tighter supplies. Defense stocks also advanced sharply, with UK-listed BAE Systems gaining 6.1%, Italy's Leonardo rising 2.5%, and Germany's Renk climbing 3.3%. Travel and tourism stocks moved in the opposite direction, registering notable declines amid the heightened uncertainty.
Aviation and shipping sectors faced direct operational pressure. The European Union Aviation Safety Agency (EASA) extended its advisory instructing airlines to avoid Middle East and Gulf airspace through March 6. Separately, several maritime insurers announced the withdrawal of war risk coverage for vessels operating in the affected waters following the strikes, signaling growing alarm over the security of global shipping lanes.
On the currency front, the euro weakened against the dollar, with the euro/dollar rate falling 0.95% to 1.1702 as of 1750 GMT.
Away from the conflict-driven turbulence, the EU and Switzerland signed a sweeping bilateral agreement package designed to strengthen ties between the two sides. On the economic data front, the euro area manufacturing Purchasing Managers' Index (PMI) rose to 50.8 in February — its strongest reading in 44 months — signaling a return to expansion in the sector.
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