FRANKFURT (dpa-AFX) - The Frankfurt Stock Exchange is poised for a sharp decline at the start of the week, fueled by escalating tensions in the Middle East. Approximately three hours ahead of the Xetra open, IG signaled a 1.2 percent drop for the DAX, pegging it at 23,507 points. The blue-chip index is thus retreating toward levels seen prior to last Wednesday's rally, which had been sparked by a short-lived ceasefire agreement in Iran.
Oil prices surged on Monday following the breakdown of peace negotiations between the U.S. and Iran and President Donald Trump's subsequent announcement of a naval blockade. Overnight, the price of a barrel of Brent North Sea crude climbed back above the 100-dollar threshold. This upward pressure weighed on Asian markets earlier today and is expected to leave its mark on domestic equities.
Acting on Trump's orders, the U.S. military has announced a blockade effective this Monday, targeting vessels entering or departing Iranian ports via the Strait of Hormuz. Military officials clarified, however, that transit for ships not bound for or originating from Iran would remain unaffected. Through the Hormuz blockade, Trump aims to prevent Iran from collecting transit fees from shipping companies while simultaneously severing the country's oil revenues./tih/zb
