European stocks inched higher on Monday, with both the STOXX 50 and STOXX 600 advancing about 0.3% after a muted opening. Investors remained focused on escalating tensions in the Middle East and their potential impact on global growth and the monetary policy outlook.
Oil prices extended their rally, reaching their highest levels since 2022. The sustained rise in energy costs is increasingly seen as a possible drag on economic activity, which could in turn constrain central banks’ ability to continue raising interest rates. Geopolitical frictions with Iran showed no signs of easing, and US President Trump floated the possibility of seizing Iranian oil assets, including the key export terminal at Kharg Island.
Sector-wise, utilities and energy led the gains, while technology and basic materials also traded in positive territory. Among notable movers, Shell rose 1.5%, AstraZeneca 1.1%, Nestlé 1.4%, TotalEnergies 1.9%, and Iberdrola 2.1%. On the downside, HSBC slipped 0.2%, Hermès 0.4%, Siemens 0.5%, and UBS 0.9%.
