European shares fell sharply on Monday, reaching their lowest point in over two months, as the pan-European benchmark index dropped 2.34% to 585.08 points. This decline follows a 5.5% drop last week, marking the index's worst performance in nearly a year. The ongoing U.S.-Israeli conflict involving Iran has intensified inflation worries, particularly as oil prices surged by more than 25% to nearly $120 per barrel. The conflict has raised concerns about prolonged shipping and supply disruptions in the Middle East. Major sectors were affected, with banks declining by 3.2% and technology stocks falling 3.1%. Notably, airline carriers such as Lufthansa and Air France KLM saw significant drops of 3.9% and 5.2%, respectively. In contrast, energy stocks saw a slight increase of 0.1% due to rising crude prices, while defense company Leonardo gained 1.4%. Market attention is now focused on comments from European Central Bank (ECB) President Christine Lagarde and other euro zone finance ministers during the Eurogroup meeting, especially after data revealed a larger-than-expected decline in German industrial orders for January.