FRANKFURT: European shares surrendered early gains on Tuesday to close lower for a third straight session, led by declines in commodity-linked stocks as investors weighed a fragile Iran-Israel ceasefire.
The pan-European index STOXX 600 edged down 0.5 percent to 618.64 points, with miners and energy stocks leading losses, down 2.5 percent and 2.4 percent, respectively.
Sentiment around the Middle East conflict remained cautious. US Energy Secretary Chris Wright said ship traffic through the Strait of Hormuz, a key global energy route, was rising “very meaningfully”.
Hopes for a durable easing in tensions were tempered after Israel struck the historic port city of Tyre in southern Lebanon on Tuesday, killing at least eight people. Tehran had warned on Monday it would resume hostilities if Israel continued attacks on its ally Hezbollah in Lebanon.
“The markets have been moving in a holding pattern for the last week or two, with what’s happening in the Middle East and smaller impact from some of the AI driven volatility that we’re seeing in Asian and US markets,” said Craig Cameron, portfolio manager at Franklin Templeton.
European technology stocks, which have seen bouts of volatility recently, showed signs of steadying earlier in the session but ended 1.3 percent lower, tracking Wall Street peers.
Even so, the sector remains set for the strongest quarterly gain on the STOXX 600.