European stocks declined broadly on Monday as the military conflict in the Middle East showed no signs of abating, although energy and defense shares posted notable gains.

The pan-European STOXX 600 index fell 1.8%, hitting its lowest level since mid-February at 622.35 by 0812 GMT, retreating from a record high hit on Friday, with most sectors declining sharply, according to Reuters.

Shares in the travel and leisure sector, including airlines and hotels, recorded the biggest drop, falling 4.4%. Germany's Lufthansa fell 11% after extending the suspension of its flights due to the situation in the Middle East.

Banks also saw declines, with shares falling 3.6%, while insurance company stocks dropped 2%. Conversely, shares in defense companies such as BAE Systems, Rheinmetall, Saab and Leonardo rose between 5% and 8%.

Major energy firms, including Shell, BP and TotalEnergies, saw gains of more than 5% each after oil prices rose about 13% due to disrupted traffic in the vital Strait of Hormuz following retaliatory attacks. The energy index rose 3.5%.

New military strikes were launched by the United States and Israel. These actions followed weekend attacks that resulted in fatalities, prompting a barrage of missiles across the region, raising fears of a wider conflict and the potential involvement of neighboring countries.