European stock indexes mixed, oil rises

The STOXX 600 was down 0.2% on the day, but still ​close to its highest since the war began

European stock indexes were mixed on Tuesday, pulling back slightly from recent gains, and oil prices rose ‌after new U.S. strikes in Iran dampened investors’ hopes that an Iran-U.S. peace deal could be imminent.

Market sentiment had turned more positive over the past week, as traders bet on a de-escalation in the U.S.-Israel war on Iran, which has severely disrupted Middle East oil and gas supplies since it began in ​late February.

But traders re-adjusted this view on Tuesday after the U.S. said on Monday that it had carried out what ​it called defensive strikes in Iran. As talks continue, U.S. Secretary of State said on Tuesday ⁠negotiating a deal with Iran could “take a few days”.

At 0843 GMT, the STOXX 600 was down 0.2% on the day, but still ​close to its highest since the war began. London’s FTSE 100 was up 0.7% on the day, while Germany’s DAX was down 0.7%. ​The MSCI World Equity Index was flat, but up 3.8% so far this month.

Peter Schaffrik, global macro strategist at RBC Capital Markets, said that uncertainty in the Middle East was weighing on markets.

It went from agreement is near to everyone needs to sign the Abraham Accords to bombing, so it’s not entirely ​clear what’s going on there, he said, referring to Trump saying on Monday that he had told additional countries to ​sign the Abraham Accords, as he tried to negotiate an agreement to end the war with Iran.

Oil prices advanced, with Brent Crude futures up 3.6% on the ‌day at $99.64 ⁠a barrel.

Still, there was some underlying optimism in the market, Schaffrik said, as traders held on to hope that the Strait of Hormuz could reopen to traffic soon. Brent crude has come down significantly from its late-April peak above $120.