European Stocks Slide as Oil Prices Soar Amid US-Iran Tensions

European stock markets declined on Monday due to rising oil prices following a fresh exchange of strikes between the US and Iran. This increase in oil prices has fueled inflation concerns, leading investors to anticipate that the European Central Bank may need to continue raising interest rates beyond its upcoming meeting.

The pan-European STOXX 600 index fell by 0.1% to 649.98 points as of 0850 GMT. The Swiss main index dropped 1.2%, while Germany's DAX declined by 0.3%. Novartis shares plummeted 3.4% after its cholesterol drug failed in a closely watched study, casting doubt on the therapeutic approach.

The AfD party won state elections in Saxony-Anhalt with 44% of the vote, dealing a significant blow to Chancellor Friedrich Merz. However, it remains unclear whether the AfD can form a government. Energy stocks rose by 1.2%, tracking higher oil prices, while Brent crude futures increased by more than $1 a barrel.