Europe close: Stocks mixed as oil prices rise on fresh Hormuz strikes

(Sharecast News) - European shares were mixed at the close on Monday and oil prices remained higher as the US military launched fresh strikes on Iran amid rising tensions over the Strait of Hormuz.

The pan-European Stoxx 600 slipped 0.01% to 641.01.

Germany's DAX edged up 0.19% to 641.01 and France's CAC 40 rose 0.31% to 8,364.65, while London's FTSE 100 eked out gains of 0.01% to 10,498.29.

In commodities, Brent crude futures were last up 5.12% on ICE at $79.90 per barrel, while the NYMEX quote for West Texas Intermediate gained 5.07% to $75.03.

Dan Coatsworth, head of markets at AJ Bell, said global stocks were under pressure from renewed tensions between the US and Iran, although the FTSE 100 was partly insulated by its large energy weighting.

"Index heavyweights BP and Shell are beneficiaries of a concerted move higher in oil prices," he said.

"This upwards shift in crude reflects concern about the fate of the fragile truce between Washington and Tehran after renewed strikes over the weekend."

Tehran said it had closed the Strait of Hormuz, although US president Donald Trump insisted the key shipping passage remained open.

US forces began launching further strikes against Iran at 2100 GMT on Sunday, according to US Central Command, in an effort "to continue degrading their ability to attack civilian mariners and commercial ships freely transiting the Strait of Hormuz".

Iran retaliated by attacking countries in the region that host US military forces. Jordan's army said it had shot down four Iranian missiles, while Kuwait said it was responding to "hostile aerial targets" and Bahrain accused Tehran of targeting civilians.

David Morrison, senior market analyst at Trade Nation, said the focus had returned to the Strait of Hormuz, with Iran claiming it had closed the vital choke point for oil and chemical shipments, while the Trump administration insisted it remained open for business.

"Either way, there has been a drop in the number of vessels traversing it, or else they have switched off their transponders," he said.

Morrison said oil prices had gapped higher as markets reopened after the weekend, with traders responding to further tit-for-tat military exchanges between the US and Iran.

"The bottom line is that there are fewer ships passing through the Strait than there were last week or the week before that," he said.

"Although it has been suggested that ships in the region have turned off their transponders."

He said oil had technically rebounded from very oversold levels, although markets had so far been successful in keeping a lid on prices by avoiding the Strait, increasing production and releasing stored inventories.

Oil stocks in the green, travel and tech plays fall

In equity markets, oil stocks rose as tensions around the Strait of Hormuz pushed crude prices higher.

Aker BP gained 3.34%, Repsol rose 4.07% and Equinor advanced 4.92%.

Coatsworth said BP and Shell had helped support the FTSE 100, while housebuilders also recovered from lows reached after last week's profit warning from Vistry.

"Add in housebuilders mounting a recovery from the lows reached after last week's big profit warning from Vistry, and the UK's flagship index looks decidedly healthy when compared with the sickly performance elsewhere," he said.

Travel and leisure names fell on the risk of higher fuel costs and renewed regional disruption.

Deutsche Lufthansa dropped 4.14%, Ryanair lost 2.2% and TUI declined 1.6%.

Technology shares were also weaker after SK Hynix slid in Seoul following its Nasdaq debut last week.

ASML Holding fell 1.8%, while BE Semiconductor Industries lost 3.25%.

Reporting by Josh White for Sharecast.com.