Europe close: Shares slip into red on MEast worries, energy supply fears

(Sharecast News) - European shares closed lower on Thursday as the continuing US-Iran stalemate and elevated energy prices amid dwindling supplies weighed on sentiment.

The pan-regional Stoxx 600 index closed down 0.07% to 659 with all major continental bourses higher.

Britain's FTSE 100 fell 0.3% despite the UK economy unexpectedly expanding in June, offering some reassurance `over the domestic `growth outlook.

Shares had rallied earlier in the session after data on Wednesday showed US inflation eased in July, with the headline consumer price index slipping to 3.4% yearonyear, down from 3.5% in June, although prices were still higher than before President Donald Trump started his war of choice with Iran.

Combined with a weak jobs report last week, the data dampened the possibility of a rate hike although policymakers are wary of persistent inflation.

Federal Reserve officials last month voted 9-3 to maintain rates - the first time in a decade that three board members shared dissent over a policy decision.

Oil prices fell after forecasters cut back the 2026 global demand outlook, citing the war in Iran and Lebanon. Brent crude was down 0.99% to $88.11 a barrel, while West Texas Intermediate fell 1.07% to $82.38.

The International Energy Agency warned on Wednesday that global oil stockpiles are rapidly diminishing. Traffic through the crucial Strait of Hormuz is almost non-existent, despite Trump's insistence the waterway is open and the US still controls it.

Meanwhile, a key adviser to Iran's Islamic Revolutionary Guard Corps said Tehran could simply drag the war out to hurt the US economy. "The longer this war lasts, the more experience we gain," said Mohammad Reza Naqdi said in an interview with PBS.

On the economics front, eurozone industrial production remained flat in June and was up by 0.2% in the EU, according to flash estimates from Eurostat, the statistical office of the European Union.

In equity news shares in Embracer Group surged as the Swedish video games maker's first quarter results beat estimates.

Maersk rose after the Danish shipping group beat earnings forecasts and raised full-year earnings guidance for a second time this year as the Middle East `conflict and strong demand pushed freight rates higher.

Adyen soared after the Dutch payments firm lifted its full-year revenue growth forecast.

Reporting by Frank Prenesti for Sharecast.com