Europe's STOXX 600 falls as oil prices jump, but secures fifth monthly gain

European shares fell on Monday as fresh U.S.-Iran military strikes drove oil ‌prices and bond yields higher, though the benchmark STOXX 600 marked its fifth consecutive monthly gain.

The pan-European STOXX 600 was down 0.6% at 651.1 points on the day, with trading volumes subdued as London markets were closed for a bank holiday.

Germany's DAX dropped 1.2%, the steepest decline among major regional indexes, after ​data showed German inflation accelerated in August as the Iran conflict lifted energy prices. However, the increase was ​smaller than expected and core inflation remained stable.

Investors have largely priced in a September interest ⁠rate increase from the European Central Bank.

"The stage looks increasingly set for another rate hike at next week's ECB ​meeting," Carsten Brzeski, global head of macro at ING, said in a note.

"The second rate hike this year would also fall into the ​category of ‘insurance rate hike’, or maybe more to the ECB’s liking: a rate hike to strengthen the ECB’s credibility and to preempt any possible indirect or even second-round effects from the current energy price shock."

Euro zone inflation figures and U.S. payrolls data will be in ​focus later this week.