A look at the day ahead in European and global markets from Gregor Stuart Hunter

Global markets were caught in the grip of heightened uncertainty as U.S. President Donald Trump sought to defend a broad, open-ended war with Iran, pummelling stocks anew and further lifting energy prices.

With Trump saying the U.S. will do "whatever it takes" to achieve its military objectives in Iran, markets were none the wiser.

As the air war continues to escalate, with reports of damage to the U.S. embassy in Riyadh and to Amazon AMZN.O data centers in the UAE and Bahrain, the safe-haven status of Gulf cities like Dubai has been called into question like never before.

That underlines the inherent risks of the widening conflict, not just for the Middle East but for the broader global economy, raising all sorts of implications including a potential spike in inflation not to mention the telling impact on investor confidence and growth.

Energy prices continue to rise, with crude up for a third day after Iran threatened to fire upon ships trying to pass through the Strait of Hormuz. Brent crude LCOc1 rose 2.5% to $79.64 as the cost of hiring a supertanker to ship oil from the Middle East to China surged to an all-time high of over $400,000 a day, LSEG data showed.

The U.S. will take action to mitigate rising energy prices, Secretary of State Rubio said, with plans set to be announced later on Tuesday.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 2.3%, led by a drop of as much as 6.5% in Korean shares, while S&P 500 e-mini futures EScv1 slid 0.8% and Nasdaq e-mini futures NQcv1 fell 0.9%.

The U.S. dollar index =USD, which measures the greenback's strength against a basket of six major peers, held close to a six-week high at 98.622 as the Iran strikes rattle market nerves and the currency regained some of its allure as a safe haven.

Japanese Finance Minister Satsuki Katayama put currency markets on notice, suggesting that intervention remains an option to defend the yen which came under more selling pressure in the wake of the Middle East crisis.

The yield on the U.S. 10-year Treasury bond was up 0.4 basis point at 4.054%, while gold XAU= advanced 0.6% to $5,359.93.

In early European trades, pan-region futures STXEc1 were down 0.9%, German DAX futures FDXc1 fell 1%, and FTSE futures FFIc1 slipped 0.3%.

Key developments that could influence markets on Tuesday:

Company earnings:

CrowdStrike, Best Buy, Target, Sea

Economic data:

Euro Zone HICP Flash for February

Debt auctions

Germany: 5-year government debt

(Editing by Shri Navaratnam)

((gregor.hunter@thomsonreuters.com))