European Markets Slide on Rising Oil Prices and Inflation Fears

European markets took a hit on Monday as oil prices skyrocketed following renewed tensions between the US and Iran. The surge in oil prices fueled inflation concerns, leading investors to speculate that the European Central Bank (ECB) may continue raising interest rates beyond its upcoming meeting.

The pan-European STOXX 600 index declined by 0.1%, while the Swiss main index dropped 1.2%. Pharmaceutical giant Novartis suffered a significant loss of 3.4% after its cholesterol drug failed in a critical study, casting doubt on its therapeutic strategy.

Germany's political landscape added to market volatility, with the far-right AfD party leading in Saxony-Anhalt ahead of France's presidential election. However, energy stocks saw an increase as Brent crude prices climbed due to supply disruptions caused by tit-for-tat strikes in the Strait of Hormuz.