European shares edged higher on Monday as investors weighed signals from U.S.-Iran peace talks against political uncertainty in Britain following reports that Prime Minister Keir Starmer could resign.
The pan-European STOXX 600 index opened 0.1% higher while Germany’s DAX was largely unchanged. France’s CAC 40 was up 0.1% and Italy’s FTSE MIB edged 0.1% lower. .
In London, the FTSE 100 held steady as markets awaited an official statement from Downing Street. The muted trading followed media reports that Starmer was poised to step down after a parliamentary election victory by his internal rival, Andy Burnham.
Investors also have their focus to the European Central Bank. Speeches scheduled later in the day by President Christine Lagarde and Chief Economist Philip Lane are expected to offer a crucial pulse check on the bank’s monetary trajectory.
Traders are eager to see how policymakers intend to balance lingering inflationary pressures following a recent war-induced rate hike, especially now that hostilities in the Middle East have shown signs of easing.
That easing, however, looks increasingly complicated. European equities scaled record heights last week after Washington and Tehran signed a landmark peace deal that reopened the Strait of Hormuz – a vital energy transit duct that keeps Europe powered.
But clarity has quickly devolved into confusion. While Tehran now claims the Strait is closed once again, maritime tracking reports suggest shipping traffic is still moving through, leaving a market already reeling from a volatile Sunday.
The geopolitical whiplash intensified just as U.S. and Iranian negotiators sat down for talks in Switzerland. U.S. President Donald Trump threatened fresh military strikes against Iran, tying the rhetoric to ongoing Hezbollah hostilities in Lebanon, casting doubt whether the peace deal will hold.
Conversely, Iranian negotiators claimed that tangible progress was being made behind closed doors. The lack of concrete details, however, has left traders on edge.
Analysts have noted that the European rally seen last week could lose steam as focus on was shifting to fundamentals and valuations from geopoltical rhetorics.
Eurozone’s consumer confidence data for June was due later in the day.
Among individual stock moves, EasyJet gained 3% after the Castlelake third bid for the low-cost airline.
Babcock fell nearly 4% after it missed pre-tax profit estimates, while Bioarctic jumped 8% after a collaboration agreement with Eli Lilly.
Source:
