Following the international mood, European stocks are down sharply in the wake of Israel‘s strike on Iran‘s strategic infrastructure targeting its nuclear program, while concerns of a generalized conflict in the Middle East are intensifying as Iran pledges to retaliate.

The pan-European Stoxx 600 is down more than 1%, down 1.13% at 543.63 points, with airline stocks down significantly on rising oil prices.

In the main boards, the British FTSE 100 is down 0.67%, the German DAX is down 1.45%, the French CAC 40 is down 1.31%, the Italian FTSE MIB is down 1.47% and the Spanish IBEX 35 is down 1.52%.

European airline shares fell in early trading as Israeli strikes pushed up the price of oil and sparked a run on risk assets.

Lufthansa shares fell nearly 5% on the Tradegate platform, while shares in Air France-KLM and EasyJet fell 3-4%.

Earlier, Asian markets closed in the red.

Japan’s benchmark Nikkei 225 index ended the day down 0.89% at 37,834.25, while the Topix fell 0.95% to 2,756.47.

South Korea’s Kospi fell 0.87% to close at 2,894.62, while the small-cap Kosdaq fell 2.61% to 768.86.
Australia’s S&P/ASX 200 ended the day down 0.21% at 8,547.40.

Hong Kong’s Hang Seng was trading 0.97% lower, while mainland China’s CSI 300 was down 0.63%.

India’s Nifty 50 lost 0.67%, while the BSE Sensex was down 0.82%.

Oil jumps. Brent futures rose 7.05% to $74.25 a barrel. The US West Texas Intermediate contract maturing in July closed up 7.76% at $73.32 a barrel.

At the same time, Dutch gas contracts were trading up 3.68 percent at 37.51 euros per megawatt-hour at 8:10 a.m. in Amsterdam.

Futures linked to the Dow Jones were down 593 points, or 1.38%, in the morning. S&P 500 futures fell about 1.55 percent, while Nasdaq 100 futures lost 1.73 percent.

Gold rose 1.1% and Treasuries strengthened, with the U.S. 10-year yield down three basis points to 4.33%.

“We are setting ourselves up for a volatile day, we will probably close in the red,” said Vincent Juvyns, chief investment strategist at ING, shortly before European markets opened. “The opening will be negative for Europe, typical safe havens should rise, such as the dollar, government bonds and gold.”

While the market reaction was strongest in crude oil, moves in other market pockets showed investors are watching how long tensions will last and whether the situation will escalate.

“We’re seeing classic risk-off moves,” said Matthew Haupt, a portfolio manager at Wilson Asset Management. “What we’re watching now is the speed and scale of Tehran’s reaction. That will shape the duration of today’s moves. Quite often these moves fade after the initial shocks.”