Before the bell: Europe's futures down sharply; defence, airlines, oil stocks on the radar

European shares were set to fall sharply at the open on Monday in a broad risk‑off move, as military conflict in Iran drove crude prices up sharply, and threatened to disrupt global oil flows for weeks, as well as causing turmoil for international travel.

After steep losses in equity markets in Asia, EuroSTOXX 50 and DAX futures pointed to declines of more than 2%. Futures on the commodity‑heavy FTSE 100 fell less than 1%, with oil stocks expected to get support from a surge in crude prices.

Defence shares .SXPARO were set for strong gains as the escalation in the region added to expectations of higher U.S. defence spending.

In early Frankfurt trade, shares in oil majors BP BP.L and Shell SHEL.L, as well as defence contractors BAE Systems BAES.L and Rheinmetall RHMG.DE, were all rising more than 4%.

Lufthansa LHAG.DE and TUI TUI1n.DE were indicated to open nearly 12% lower in pre‑market dealing as the conflict caused major disruptions for airlines and travel operators.

Bank stocks .SX7P, which carry significant weight in European indexes, were also marked lower as the crisis threatened the global economic outlook.

On Monday, Israel launched new air strikes targeting Tehran and widened its campaign to include attacks on Iran‑backed Hezbollah militants in Lebanon, as U.S. President Donald Trump signalled the U.S.-Israeli assault on Iranian targets could continue for weeks.