Europe midday: Shares rally despite Trump threats on Iranian oil

(Sharecast News) - European shares rallied on Monday despite the oil price hitting $116 a barrel after US President Donald Trump threatened to take Iran's oil, raising concerns that American troops would be deployed on the ground. The pan-regional Stoxx 600 index had gained 0.28% to 576 by 1157 BST. Germany's DAX fell 0.2%, France's CAC 40 rose 0.09% and the oil-heavy FTSE 100 gained 0.68%.

Attacks continued across the Gulf as Trump's war of choice with Iran escalated and widened to the south after Yemen's Houthi launched strikes on Israel.

The missile attacks sparked fears the Tehran-backed rebels could try to restrict shipping through the Bab el-Mandeb in the Red Sea, another major oil supply choke point in the Middle East alongside the Strait of Hormuz.

Tensions weren't eased when Trump said his "preference would be to take the oil" in Iran and that US forces could seize the regime's export hub on Kharg Island.

The president compared the scenario to his ousting of Venezuela's leader Nicolas Maduro in January and the US annexation of the country's oil industry "indefinitely".

"To be honest with you, my favourite thing is to take the oil in Iran, but some stupid people back in the US say: 'why are you doing that?' But they're stupid people," Trump told the Financial Times.

His comments sent Brent crude to $115 a barrel as soon as trade started and it soon jumped above $116, nearing levels seen after Russia's unprovoked invasion of Ukraine four years ago. The oil benchmark has surged 59% this month alone - the biggest monthly jump on record.

"Global markets are heading into the week on edge as the Iran conflict continues to cast a long shadow. Fresh worries that troops could be drawn further into the conflict are keeping volatility elevated and confidence fragile," said Hargreaves Lansdown analyst Matt Britzman.

"With the volatility index (Vix) closing last week at 31, its highest level since last April's tariff tantrum, investors should be prepared for another turbulent week."

On the economics front business and consumer sentiment in the eurozone deteriorated in March as price expectations increased amid the conflict in the Middle East, according to a survey released on Monday by the European Commission.

The EC's economic sentiment indicator fell to 96.6 from a 98.2 in February. This was below expectations for a reading of 96.8. The sentiment indicator for the European Union declined by 1.5 points to 96.7 in March.

Meanwhile, selling price expectations for industry jumped from 12.3 to 19.7 in March - the highest level since February 2023.

In Germany, inflation rose to at least 2.5% in four states in March, driven by energy price shocks from the U.S.-Israeli war on Iran, indicating the national CPI figure is also likely to show an increase when data is published later on Monday.

In equity news, Norsk Hydro and Orsted led the gainers as alternative energy sources found favour among investors, while Delivery Hero fell 6%, wiping out Friday's gains after reports that major shareholder Prosus was looking to offload a 10% stake on the fast-food delivery company.

Reporting by Frank Prenesti for Sharecast.com