Europe open: Shares slump on Iran-Israel exchange, AI jitters

(Sharecast News) - European shares opened sharply lower on Monday after Iran and Israel traded missile strikes while investors also feared rising interest rates and an end to the much-hyped boom in artificial intelligence. The pan-regional Stoxx 600 index was down 0.87% to 617 at 0809 BST with all major bourses in the red. Oil prices surged with Brent crude up 4.88% to $97.63 a barrel.

Israel ignored US President Donald Trump and launched airstrikes on central and western Iran, a move which threatened to reignite the Middle East war.

The strikes were a reprisal for an attack by Tehran - itself a response to Israel's bombing of the Lebanese capital Beirut over the weekend. Trump had urged restraint after Iran promised a swift response, analysts fear Tel Aviv is trying to pull Washington back into the conflict.

Sentiment was also hit over jitters around the sustainability of the boom in artificial intelligence stocks amid fears of rising interest rates as the conflict drives inflation.

Asian markets had seen a large sell-off overnight, with Japan's Nikkei index down 4%. South Korea's Kospi index fell by almost 9% at one stage, forcing trading to be temporarily suspended.

The sell-off followed losses on Wall Street on Friday driven by stronger-than-expected US jobs data, sparking fears that the next move in US interest rates would be a rise not a cut.

In equity news, European tech stocks fell, with BE Semiconductor, ASML, Aixtron and Nokia all lower.

Tate & Lyle surged after the UK ingredients firm agreed to be taken over by US peer Ingredion in a £2.7bn deal.

Zealand Pharma slumped after the Danish company released findings of a weight loss drug trial.

Reporting by Frank Prenesti for Sharecast.com