European stocks fell on Monday as fears mounted that renewed tensions between the United States and Iran over the weekend threatened to unravel the fragile ceasefire between the two sides.
The European Stoxx 600 index fell 0.8% to 621.27 points, while Britain’s FTSE 100 index declined 0.3% to 10,626.32 points.
Germany’s DAX index fell 1.09% to 24,432.86 points, while France’s CAC 40 declined by about 0.9% to 8,344.49 points.
The pressure on the markets came after statements by US President Donald Trump, in which he said that a US Navy missile destroyer targeted and damaged an Iranian-flagged cargo ship in the Gulf of Oman, before Marines boarded and took control of it.
This development represents a new escalation in the US naval blockade of the waterways leading to Iran, and comes after Tehran targeted commercial vessels attempting to cross the Strait of Hormuz.
In recent days, the United States has begun imposing a naval blockade on ships entering and leaving Iranian ports, while Tehran considers this a violation of the ceasefire and has announced the suspension of its participation in negotiations that were scheduled to be held in Islamabad.
Trump also threatened on Sunday to destroy every power plant and every bridge in Iran if Tehran does not agree to Washington’s terms for ending the conflict, while the fragile ceasefire between the two sides is set to expire this week.
In global markets, Asia-Pacific saw mixed performance overnight, while US futures fell at the start of trading on Monday, following a positive week on Wall Street that pushed the S&P 500 and Nasdaq indices to record highs, after the announcement of a ceasefire between Iran and Lebanon.
It should be noted that Tehran had announced the reopening of the Strait of Hormuz, but the movement of ships through the vital waterway was once again restricted by Saturday, amid mutual accusations between the two sides of not adhering to the terms of the agreement.
