European stock markets finished Monday’s session on a mixed note as investors assessed stronger economic sentiment alongside uncertainty surrounding US-Iran diplomatic negotiations and efforts to reopen the Strait of Hormuz.
The pan-European Stoxx Europe 600 rose marginally by 0.03% to end at 660.45 points, staying close to record levels.
France’s CAC 40 increased 0.13% to 8,726.03, while Germany’s DAX 40 advanced 0.02% to close at 26,323.88.
However, the UK’s FTSE 100 dropped 0.35% to 10,862.50, and Italy’s FTSE MIB slipped 0.1% to 53,663.88. Spain’s IBEX 35 ended almost unchanged at approximately 20,173 points.
Energy stocks led gains across the region as oil and natural gas prices strengthened on concerns that shipping disruptions through the Strait of Hormuz may continue.
European benchmark natural gas prices climbed roughly 8% as Iran and Oman had yet to reach a final deal to restore regular shipping through the strategically significant waterway.
The Strait of Hormuz carries about 20% of global LNG supplies, equal to roughly 110 billion cubic meters each year, according to the European Central Bank. Any extended disruption could heighten competition between European and Asian purchasers for available LNG shipments.
Investor sentiment also received a boost from data indicating a return to positive territory for eurozone economic confidence.
The Sentix Economic Sentiment Index increased four points to 0.9 in August, recording its fourth straight monthly rise. The expectations measure rose to 10.3, while the current conditions assessment improved considerably but remained below zero.
Markets are now looking ahead to eurozone labor market figures and US inflation data due later in the week, which could provide additional clues about the future direction of interest rates.
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