Europe stocks close lower as Hormuz tensions, US-Iran talks weigh

European stock markets closed lower Monday as negative signals from US-Iran negotiations and rising concerns over the Strait of Hormuz dampened investor sentiment.

The pan-European Stoxx Europe 600 index fell 0.16% to close at 613.88 points.

Germany’s DAX 40 slipped 0.26% to 23,742.44, while France’s CAC 40 lost 0.29% to 8,235.98.

Italy’s FTSE MIB 30 declined 0.17% to 47,527.16, and the UK’s FTSE 100 dropped 0.17% to 10,582.96.

The euro/dollar exchange rate rose 0.14% to 1.1736 as of 1740GMT.

Early optimism that tensions in the Middle East might ease gave way to renewed unease after initial outcomes of US-Iran talks deepened market concerns, leaving European equities in negative territory on the first trading day of the week.

During weekend talks held in Pakistan, the two sides reportedly remained at odds, particularly over nuclear materials and control of the Strait of Hormuz.

Commenting on the talks, US President Donald Trump said Iran had not abandoned its nuclear ambitions and announced that "the US Navy will begin the process of blockading all ships attempting to enter or leave the Strait of Hormuz."

Trump also claimed that NATO and Gulf countries would support the naval blockade.

European Commission President Ursula von der Leyen said developments in the Middle East were driving up energy costs, adding that the EU’s fossil fuel import bill has risen by more than €22 billion in the 44 days since the conflict began.