European stocks head for slump as Trump sets Hormuz deadline

LONDON — European stocks are expected to follow Asian markets sharply lower at the start of the new trading week, as further escalation in the Iran war drags on global market sentiment.

The U.K.’s FTSE 100 index is seen opening 1% lower, with Germany’s DAX down 1.5%, France’s CAC 40 down 1.4% and Italy’s FTSE MIB down 1.5%, according to data from IG.

Europe’s markets are expected to follow their Asian counterparts lower on Monday as concerns deepen over the Iran war and the blockage of vital maritime passage, the Strait of Hormuz.

U.S. President Donald Trump said Saturday that he would “obliterate” Iran’s power plants if Tehran failed to fully reopen the Strait within 48 hours

Iran responded by escalating threats to target energy infrastructure and desalination facilities in the Gulf. Iranian Parliament speaker Mohammad Bagher Ghalibaf also said Saturday that entities that purchase American government bonds and “finance the U.S. military budget” would be considered legitimate targets, alongside military bases.

Crude prices whipsawed in volatile trading earlier Monday, while Asia-Pacific markets traded lower. U.S. stock futures were little changed Sunday night with sentiment knocked after the major U.S. benchmarks posted their fourth-straight weekly loss.

Earnings reports in Europe come from Kongsberg Gruppen, Exor and Galp Energia. Spain trade balance data will also be released.

— CNBC’s Anniek Bao contributed to this market report.