Europe open: Shares mixed as Iran hits tanker in Dubai, Trump makes more threats

(Sharecast News) - European shares were mixed at the open on Tuesday as an Iranian drone hit a tanker in Dubai and US President Donald Trump threatened to obliterate Iran's energy grid and desalination plants if it did not open the Strait of Hormuz.

The pan-regional Stoxx 600 index was down 0.07% to 580 at 0823 GMT. Germany's DAX and the UK's FTSE made gains of 0.10% and 0.13% respectively, while Italy's MIB fell 0.36% and France's CAC 40 was down 0.17%.

Iran on Tuesday attacked a fully loaded Kuwaiti crude oil tanker off Dubai, officials said, adding that response teams contained the incident with no oil leakage and that no injuries had been reported.

Meanwhile, Trump continued to send confusing signals on how to end his war of choice on Iran. His latest threat was issued as a warning to Tehran to agree to peace terms "shortly", despite his claims of diplomatic progress in ending the conflict.

Oil prices are on track for a record monthly rise. Brent crude, which almost hit $117 on Monday, was up 0.65% to $113.5 a barrel, while US benchmark West Texas Intermediate gained 0.41% to $103.

Matters were further complicated by a report in the Wall Street Journal stating that Trump had told aides he was willing to end the military campaign even if the Strait of Hormuz remains largely closed, likely extending Tehran's firm grip on the key waterway and leaving a complex operation to reopen it for a later date.

"As a tumultuous first quarter draws to a close, hopes of an immediate ceasefire still seem forlorn as the warring parties continue to send out contradictory signals," said Interactive Investor head of Markets Richard Hunter.

"Oil prices continue to edge higher although at a more limited pace, while investors remain rattled by the potential implications of a conflict which is beginning to be described in terms of months rather than weeks."

"The choking of supplies through the Strait of Hormuz remains a central sticking point, where Iran is fully aware of its stranglehold in the area and is defending any attempts to enable the resumption of normal trade."

In economic news, German retail sales fell an unexpected 0.6% in February compared with estimates of 0.3% growth, official data showed on Tuesday indicating households were already cutting discretionary spending before the US and Israel started their war on Iran.

On the equities front, consumer goods giant Unilever confirmed it was in advanced talks to combine its food business with spice maker McCormick in a deal that would create a new food conglomerate worth $60bn, including debt.

Reporting by Frank Prenesti for Sharecast.com