European stock markets experienced a sharp decline on Monday as geopolitical tensions escalated following US and Israeli strikes on Iran. The Euro Stoxx 50 fell 2% and the Stoxx 600 dropped 1.8%. Major regional indices in Frankfurt, Paris, and Milan are all trading lower. London's FTSE 100 showed more resilience, down only 0.3%.
This sell-off follows a volatile weekend where Iran was targeted by ballistic missiles and drones. Shipping traffic through the Strait of Hormuz has been disrupted, and Hezbollah has reportedly entered the conflict. Asian markets also saw significant downturns, with Japan's Nikkei 225 down over 2.3% and US futures opening lower.
In response to the escalating situation, the UAE has closed the Abu Dhabi Securities Exchange and the Dubai Financial Market for two days to prevent panic selling. This decision comes after Iran reportedly faced a barrage of missiles and drones.
Amidst the market turmoil, oil prices saw an initial surge, with US benchmark crude rising about 8% and Brent crude up 6.2%. Gold prices increased by roughly 2.5%, while silver and platinum also climbed, reflecting a move towards safe-haven assets.