March 3 (Reuters) – European shares extended their decline on Tuesday as the global equity selloff deepened, as investors grappled with the prospect of a drawn-out Middle East war, and a sharp jump in oil prices led to fears of a rise in the cost of living.
The pan-European STOXX 600 was down 1.3% at 615.72 points by 0804 GMT, after closing at the lowest level in more than two weeks on Monday.
The utilities index and banks led sectors lower with 2.6% declines each, while energy climbed marginally, adding to the previous session’s gains.
U.S. President Donald Trump sought to justify a broad, open-ended war on Iran, saying the stated aims of the conflict had shifted.
An official from Iran’s Revolutionary Guards said the Strait of Hormuz is closed and any vessel trying to pass would be targeted, pushing up global oil and gas shipping rates.
European Central Bank Chief Economist Philip Lane told the Financial Times a long war could massively put upward pressure on inflation and reduce growth rate in the euro zone.
Among individual stocks, Thales gained 0.7% after the French aerospace and technology firm reported a slightly higher-than-expected annual core profit.
(Reporting by Avinash P and Pranav Kashyap in Bengaluru; Editing by Mrigank Dhaniwala)
