June 8 (Reuters) - Europe's STOXX 600 share index slid to a two-week low on Monday, weighed by escalating tensions in the Middle East and a global selloff in AI stocks, while Italian lender Monte dei Paschi di Siena jumped after a takeover bid from rival Intesa Sanpaolo.
The pan-European STOXX 600 index fell 0.9% to 616.04 points by 0812 GMT, with all major regional indexes also in the red.
Prices of crude oil, a key resource for energy-deficient Europe jumped more than 4% after Israel and Iran traded
fire through the weekend, jeopardizing a fragile ceasefire in the region and clouding any hopes for an imminent end to the conflict.
Losses were broad, with energy price-sensitive airlines such as Lufthansa and Air France down over 2% each.
Tech stocks were among top declines, down 2.1%, tracking sharp sectoral losses in the U.S. late last week and also in Asia on Monday.
Infineon slipped 1.7% and BE Semiconductor lost 3.8%. AI equipment makers Legrand and Schneider Electric fell about 2% each.
European tech shares have rallied this quarter, with the sector logging its the biggest quarterly gains among STOXX 600 sectors so far.
A stronger-than-expected U.S. jobs report has given the Federal Reserve more room to keep interest rates unchanged, with investors also contemplating a December rate hike.
Investors' focus is now on the rate decision by the European Central Bank, due on Thursday, with markets already pricing in 25-basis-point interest rate hike.
In M&A news, Italian bank Monte dei Paschi di Siena (MPS) gained 9.5% after Intesa Sanpaolo, Italy's biggest banking group, announced a €30.6 billion ($35 billion) unsolicited cash-and-share bid to buy the rival lender. Intesa slipped 3.2%.
(Reporting by Utkarsh Hathi and Johann M Cherian in Bengaluru; Editing by Janane Venkatraman)
