European markets rebound as Israel-Iran attacks continue; Renault down 6%

European Stoxx 600 banks were 1.3% higher at 9:55 a.m. U.K. time, while oil and gas stocks gained 1.18% as investors took in the latest from the Israel-Iran conflict — which is driving crude oil prices sharply higher and reigniting inflation concerns.

Sectors in decline include health-care, down 0.7%, and food and beverages, down 0.5%.

Overall, the Stoxx 600 index was up 0.33%. In a sign that last week’s safe haven flight is abating, spot gold prices slid 0.5% while the U.S. dollar index lost 0.24%.

“Investors remain alert to ongoing geopolitical tensions but they’re not reaching for their tin hats,” said Russ Mould, investment director at AJ Bell.

“The Middle East conflict remains a fluid situation and there is the potential for markets to still experience sudden jolts if the tension escalates further.”

— Jenni Reid

Shares of France’s Renault are down more than 7% after the carmaker announced Sunday that industry veteran Luca de Meo would step down as CEO.

Kering shares meanwhile jumped 7%, amid reports that de Meo is heading to the French fashion house next.

The move — unconfirmed by Kering or de Meo — was nonetheless subject of several analyst notes Monday, with Bernstein writing that the Kering job would align with the exec’s forte for brand management and marketing. Read more from CNBC’s Karen Gilchrist here.

— Jenni Reid

— Jenni Reid

The chief of Airbus expects more muted aircraft orders at this week’s Paris Air Show as defense concerns rise to the fore and last week’s deadly Air India crash casts a shadow over the event.

“We are all under this… the consequences, the impact of the accident of Air India. And obviously that’s a bad situation to come into an air show, which is supposed to be something positive,” Airbus CEO Guillaume Faury told CNBC’s Phil LeBeau.

“Still, the momentum in the industry is very strong,” he continued. The 2023 Paris show — Europe’s biggest aviation industry event, which is held on alternating years with the U.K.’s Farnborough — was “exceptional” because it came out of a four-year pandemic lull, Faury noted. He nonetheless expects to see “important” orders at this year’s event, he told CNBC.

“We see also very different situation when it comes to security and defense, and it’s going to be a show where a lot of international delegations will be present,” he added.

IBA has predicted manufacturers could see between 700 and 800 commercial aircraft orders during the show, down from around 1,300 in 2023. Orders at last year’s Farnborough were notably weaker, with supply chain challenges continuing to plague the industry.

— Jenni Reid, Leslie Josephs

Crude oil prices have been highly volatile as traders monitor the latest from Israel-Iran airstrikes. At 7:43 a.m. London time, U.S. West Texas Intermediate futures were up 0.7% to $73.50 per barrel, and global benchmark Brent was up 0.46%, at $74.57 per barrel.

Oil prices closed more than 7% higher Friday in the biggest single-day move since March 2022, after Israel launched a wave of airstrikes on Iran that it said were targeted at its nuclear and ballistic missile programs as well as its senior military leadership.

U.S. crude oil jumped 13% in total last week, and was up another 3% on Sunday.

Israeli unmanned aerial vehicles struck the South Pars gas field in southern Iran on Saturday, according to Iranian state media reports.

— Jenni Reid, Spencer Kimball

It’s a busy week for investors and markets, with the U.S. Federal Reserve’s next interest rate decision due Wednesday.

Fed funds futures are pricing in a nearly 97% likelihood of the central bank keeping rates unchanged, as per CME’s FedWatch tool, despite U.S. President Donald Trump’s continued pressure on Fed Chief Jerome Powell for a rate cut.

Some key gatherings and data releases will also be watched closely this week. The Paris Air Show kicks off Monday, and last week’s Air India disaster and flaring tensions in the Middle East are likely to dominate conversations there. Meanwhile, the Group of Seven industrialized nations are meeting in Canada for the next few days.

On the data front, the ZEW survey of economic sentiment in Germany and Europe will be released on Tuesday and U.K. inflation data is due Wednesday.

We then have the Bank of England’s monetary policy decision on Thursday. Economists aren’t expecting a rate cut at the meeting, with the bank highly likely to keep its base rate at 4.25%.

— Holly Ellyatt

Good morning and welcome to CNBC’s live blog covering European financial market action and the latest regional and global business news, data and earnings.

Futures data from IG suggests London’s FTSE will open 2 points lower at 8,841, Germany’s DAX down 42 points at 23,455, France’s CAC 40 down 14 points at 7,664 and Italy’s FTSE MIB 65 points lower at 39,858.

Global markets on Monday will be assessing escalating Israel-Iran tensions after a weekend of tit-for-tat missile attacks and airstrikes. Oil prices have risen as a result of the strikes, which have seen energy facilities targeted, and gold prices have rallied as investors sought a safe haven asset.

— Holly Ellyatt