European shares fall as Middle East tensions push oil higher

European markets retreated on Monday as hopes for a diplomatic resolution in the Middle East faded. The pan-European STOXX 600 index fell 0.7% to 610.52 points by mid-morning, reflecting investor concern over the collapse of negotiations between the United States and Iran. Washington's decision to initiate a blockade around the Strait of Hormuz has intensified fears of a prolonged conflict, threatening global energy supplies.

Regional indices showed broad declines, with Germany's DAX dropping 1% and the FTSE 100 in the United Kingdom slipping 0.4%. Despite the downturn, the benchmark index remains closer to its record highs than the lows seen in mid-March. Rising geopolitical tensions have pushed energy costs higher, reigniting inflation concerns that had briefly subsided.