FRANKFURT: European shares declined on Monday, following a sharp rebound in the previous session, as investors awaited progress on possible US-Iran talks ahead of the expiry of the two-week ceasefire.
Iran was considering attending peace talks in Pakistan, a senior Iranian official said, following Islamabad’s attempts to end a US blockade of Iran’s ports, a major hurdle for Iran to rejoin peace efforts.
The pan-European STOXX 600 index closed down 0.8 percent at 621.46 points. Other major regional markets also fell, with France’s CAC and Germany’s DAX down 1.1 percent each.
“European investors are looking at very obvious facts of higher oil and more uncertainty about products flowing out of the Persian Gulf … so there is a clear concern that’s being expressed in European shares,” said Steve Sosnick, chief market analyst at Interactive Brokers.
The move comes after Friday’s optimism, which saw the STOXX 600 jump more than 1 percent to post its fourth straight weekly rise after Iran declared the Strait of Hormuz open. European equities have lagged their US counterparts since war erupted at the end of February, as elevated oil prices weigh heavily on the energy-dependent region, keeping investors on edge.
“European equities haven’t done poorly, they’re lagging behind the US peers as the US is simply better positioned to weather the current crisis with less economic damage than Europe,” said Daniela Hathorn, senior market analyst at Capital.com.
Energy shares gained 1.6 percent as crude prices surged. British majors BP and Shell and France’s TotalEnergies gained between 1.8 percent and 2.9 percent. On the flip side, the travel and leisure sector led declines with a 2.4 percent fall, bearing the brunt of higher energy costs and rising geopolitical tensions.
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