Europe open: Crude spikes, Stoxx down as US-Iran spat drags on

(Sharecast News) - European shares opened lower as US forces launched their ninth straight day of strikes against Iranian targets, sending oil to its highest level since June and increasing investor jitters over potential rate hikes.

The benchmark Stoxx 600 index was down 0.17% to 640 at 0805 BST with all major European bourses in the red.

US President Donald Trump, returning from being booed at the World Cup football final in New York, said the latest attacks were retaliation for the deaths of three American military personnel.

In response, Iran's Revolutionary Guard said it hit US military targets in Kuwait and targeted US aircraft parked at Jordan's Aqaba airport with ballistic missiles. Sirens were also heard in Bahrain on Monday.

Oil prices jumped in early trade amid increasing tensions over the Hormuz strait, with Brent crude rising 3.09% to $90.82 a barrel, having hit $91, the highest price since June.

The price spike and its inflationary impact will be front and centre at the European Central Bank, where policy makers meet on Thursday, with expectations they will hold rates at 2.25% after a pre-emptory rise last month. Analysts now expect a rise in September meeting and rates of 2.75% early next year.

Market sentiment was also hit by falls in Asia as investors unwind tech positions after realising the boom in artificial intelligence and related stocks may not be more hype than reality.

In equity news oil majors rose in line with the crude price increase, while Ryanair slumped as the low-cost carrier's results missed forecast due to Iran war.

Reporting by Frank Prenesti for Sharecast.com