European stocks took a significant hit on Monday, continuing the downward trajectory from the previous session due to rising fears of a potential recession in the U.S. economy.
Market apprehensions were further intensified by the growing conflict in the Middle East, with speculations that the Benjamin Netanyahu-led Israeli government might authorize a pre-emptive strike on Iran to thwart a possible attack on Israeli territory.
In economic updates, a survey highlighted that the eurozone economy became stagnant in July as the demand for goods and services declined. The HCOB composite PMI output index dropped to a five-month low of 50.2, compared to 50.9 in June. Similarly, the services PMI business activity index declined to 51.9 from 52.8 the previous month.
Conversely, the U.K. service sector exhibited slightly accelerated growth in July, driven by the highest rate of demand increase in over a year. The S&P Global Services PMI climbed to 52.5 in July from 52.1 in June, slightly above the preliminary estimate of 52.4.
However, the Eurozone Sentix Investor Confidence plummeted from -7.3 to -13.8 in August, its lowest point since January.
The pan-European STOXX 600 dipped 2.3 percent to 486.27, following a 2.7 percent drop on Friday to a more-than-three-month low. Germany's DAX declined 2.2 percent, France's CAC 40 fell 1.9 percent, and the U.K.'s FTSE 100 decreased by 2 percent.
In corporate news, Galderma AG surged 7.2 percent after L'Oreal announced it had acquired a 10 percent stake in the Swiss dermatology company for an undisclosed amount. However, chip equipment manufacturers ASM International and ASML saw declines of 3-4 percent.
Germany's Infineon Technologies showed little change, reversing early gains after reports indicated Nvidia would delay its next-generation artificial intelligence chips by at least three months.
Aurubis plummeted 7.8 percent after the copper producer's third-quarter earnings before tax fell short of expectations.
OCI Global's stock jumped 10 percent following Woodside Energy's agreement to acquire the Dutch chemicals maker's clean ammonia project in Texas for $2.35 billion.
Despite posting a 10 percent rise in first-half profit, British engineering firm Senior saw a 5.5 percent drop in its stock price. Similarly, ship broker Clarkson slumped 8.5 percent after reporting reduced sales and profit in the first half of the year.
