Europe midday: Losses pared as Iran responds to latest US peace plan

(Sharecast News) - European stocks pared losses on Monday as Iran said it had responded to a US peace proposal, easing tensions after Donald Trump once again threatened to resume bombing if Tehran did not sign a deal.

The pan-regional Stoxx 600 index was down 0.32% to 604.96 points at 1146 BST with major bourses mixed.

"For Iran, the clock is ticking, and they better get moving, fast, or there won't be anything left of them," Trump warned in a social media post on Sunday, adding: "Time is of the essence."

In response to news that the US had replied to the latest US plan to end the war, an Iranian foreign ministry spokesperson said: "As we announced yesterday, our concerns were conveyed to the American side."

There were also reports over the weekend that the US and Israel are preparing to resume joint attacks on Iran as soon as this week. According to the New York Times, citing two Middle East officials, the US and Israel are engaged in "intense preparations" for a potential resumption of hostilities.

Meanwhile the United Arab Emirates blamed a fire near its nuclear power plant on a drone launched by Iran or one of its proxies in what it called a "dangerous escalation". The fire just outside the Barakah nuclear plant caused no injuries or radiation alerts, with the emirate's nuclear regulator stating there was no radioactive leak or risk to the public.

Fears over oil supply were also heightened by an escalation of drone attacks between Ukraine and Russia, which Hargreaves Lansdown analyst Derren Nathan said was "a reminder that it's not only Middle Eastern oil exports being disrupted by conflict".

"Russia remains the world's second-largest exporter and, while restrictions on exports to countries such as India have been temporarily lifted, those waivers are set to expire soon."

Brent crude slipped back to $110 a barrel, still a rise of 1.09% on the day.

Sentiment was further hit by a flurry of data out of China which showed the economy faltered in April, with both retail sales and industrial production significantly undershooting forecasts.

According to the National Bureau of Statistics, retail sales rose by just 0.2% last month, a notable slowdown on March's 1.7% uplift and well below expectations for a 2% rise. It was the slowest month of growth since 2022.

Industrial output, meanwhile, grew by 4.1%, weaker than the previous month's rate of 5.7% and below forecasts for a 5.9% hike.

In equity news, Ryanair shares fell after pulling profit guidance for the current financial year as a result of material uncertainty linked to the spike in jet fuel prices and other rising costs, adding that summer fares are likely to fall year-on-year.

Publicis jumped after the French advertising company on Sunday agreed to buy US data platform LiveRamp for a total enterprise value of $2.2bn.

Reporting by Frank Prenesti for Sharecast.com