Hormuz Tensions Squeeze Eurozone Markets Amid ECB Rate Hike Fears

European shares started the week on a subdued note due to escalating tensions in the Persian Gulf and an impending interest rate hike by the European Central Bank.

The pan-European STOXX 600 index dropped 0.1% as investors processed fresh geopolitical friction along one of the world's most critical maritime bottlenecks, the Strait of Hormuz.

Iran has signaled plans to declare a restricted zone outside the strait in response to US forces striking and disabling three Iranian oil tankers over the weekend.

This move threatens to choke off around 20% of global seaborne oil and gas flows, raising concerns about a cost-push stagflation shock across European industrial supply chains.