Europe open: Stoxx slumps as airline, leisure shares hit by Iran war

2nd Mar 2026 07:55

(Sharecast News) - European shares plunged at the open after the US and Israel started a war with Iran on Saturday, assassinating the country's leader and several members of his administration, hitting the airline and leisure sectors while defence and oil stocks posted big gains.

The pan-regional Stoxx 600 index fell 1.78% to 622 at 0826 GMT. Germany's Dax was down 2.28%, France's CAC 40 declined 1.9%, Italy's MIB 2.4% and the UK's FTSE 100 0.95%.

Markets had been braced for a fall after airstrikes on Tehran killed Ayatollah Ali Khomenei in a war US President Donald Trump said was aimed at regime change in the Persian Gulf state.

The attacks across multiple provinces sparked a wild reaction from Iran, which fired missiles and drones across the region, hitting US bases in Kuwait and Bahrain, along with other strikes on Israel, Oman, Dubai and the British air force base on Cyprus.

The Brent crude oil price jumped 10% to $80 a barrel, its highest level in more than seven months on fears of supply disruption as Iran's Revolutionary Guard warned ships not to use the vital Strait of Hormuz - through 20% of the world's oil is transported, along with other commodities.

Oli producers surged in response, with Equinor, BP, Var Energi, Galp, Repsol, Aker BP and Shell higher.

Airline stocks were hammered after flights through the region were cancelled and travel suspended, leaving hundreds of thousands of passengers stranded. British Airways owner IAG, Lufthansa, easyJet and Ryanair all fell sharply.

The turmoil also hit other travel stocks in the leisure sector, with cruise line Carnival, package holiday giant TUI and hotel chains Hilton and Accor slumping.

Defence stocks rose with the latest addition to the world's geopolitical turmoil. BAE Systems, Renk, Hensoldt, Saab, Leonardo and Kongsberg were all major gainers.

Reporting by Frank Prenesti for Sharecast.com