Frankfurt's DAX 40 dropped nearly 3% to below the 23,000 mark on Monday, a low level not seen since April 2025, extending previous week's decline. The index moved in line with other European peers as heightened Middle East tensions and soaring oil prices raised fears of a prolonged energy crisis and a global inflationary shock. Traders are ramping up their bets on ECB rate hikes, now pricing in two 25-basis-point increases this year, up from expectations of just one as of Friday. Adding further pressure, latest data showed German manufacturing orders plunged in January, while industrial activity also shrank. Losses were seen across all sectors, led by industrials, tech stocks and banks. Airlines companies such as Deutsche Lufthansa slipped 6.5%. Siemens Energy, Continental, MTU Aero Engines, Airbus, Infineon Technologies, Siemens and Heidelberg Materials saw losses between 3.8% and 5.4%. Deutsche Bank and Commerzbank dropped 3.3% and 2.8%, respectively.