BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks closed mostly lower on Tuesday weighed down by concerns about escalating tensions between Iran and the U.S., elevated oil prices and rising bond yields.
Oil prices climbed higher after a cargo vessel was reportedly struck by an unknown projectile in the Strait of Hormuz early on Tuesday local time.
The United Kingdom Maritime Trade Operations (UKMTO), a Royal Navy-sponsored organization, said on Tuesday that it had received a report of an incident in the Strait of Hormuz.
The 60-day Middle East ceasefire agreement has expired and U.S. President Donald Trump said that he is not interested in renewing the agreement with Iran and threatened to bomb Oman if it 'gets in the way' of a deal with Iran on the Strait of Hormuz.
Meanwhile, Iran has warned of a strong response to any fresh attacks, saying its is preparing to shift to a 'fully offensive' military posture.
The pan European Stoxx 600 ended down 0.69%. Germany's DAX shed 0.8% and France's CAC 40 closed with a loss of 0.82%, while the UK's FTSE 100 outperformed and edged up 0.07%. Switzerland's SMI closed 0.13% up.
Among other markets in Europe, Austria, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Spain and Sweden closed weak.
Iceland, Portugal and Russia ended higher, while Belgium, Czech Republic and Türkiye closed flat.
In the UK market, energy stocks BP and Shell moved up 2.7% and 1.8%, riding on higher oil prices
Relx, Experian, Burberry Group, AstraZeneca, Marks & Spencer and Smith & Nephew gained 2%-3%. GSK, United Utilities, National Grid, JD Sports Fashion, BT Group, Severn Trent, Haleon, The Sae Group, Coca-Cola Europacific Partners, Unilever and Centrica also ended sharply higher.
Miners Anglo American Plc, Fresnillo, Endeavour Mining and Antofagasta declined sharply. Bank stocks Barclays and Natwest Group ended weak.
Polar Capital Technology Trust dropped 4.2%. Halma, Babcock International, Weir Group, Lion Finance, Diploma, Land Securities, IAG, Metlen Energy & Metals and Barratt Redrow also ended notably lower.
In the German market, Infineon Technologies tumbled more than 7%. Siemens Energy dropped 5.2%. Heidelberg Materials, Siemens, Airbus, MTU Aero Engines, Continental, RWE, Commerzbank, Daimler Truck Holding, Symrise, Vonovia and Hochtief lost 1%-3%.
Bayer, Deutsche Telekom, SAP, Adidas, Munich RE, Siemens Healthineers, Deutsche Post, E.ON, Beiersdorf and BASF gained 1%-2%.
In the French market, STMicroelectronics shed more than 6%. Schneider Electric drifted down by about 4.4%. Legrand lost 4%.
Societe Generale, ArcelorMittal, Safran, Airbus, Credit Agricole, Saint-Gobain, Bouygues, Michelin, BNP Paribas, Unibail Rodamco and Stellantis also closed notably lower.
EssilorLuxottica and Dassault Systemes both ended higher by about 2.5%. Carrefour, L'Oreal, Publicis Groupe, Sanofi, TotalEnergies and Capgemini gained 1%-1.5%.
Data released by the Office for National Statistics showed the unemployment rate in UK remained stable in the three months to June.
The unemployment rate stood at 4.9% in the June quarter, unchanged from the preceding period. The rate was seen at 4.8%.
The number of vacancies decreased 6,000 to 707,000 in the three months to July.
Average earnings excluding bonus logged an annual increase of 3.5%. Including bonus, earnings advanced 4.1% from the last year.
In July, payroll employment decreased 94,000 from the previous year and by 13,000 on a monthly basis to 30.3 million, data showed.
A report from the European Economic Research (ZEW) said Germany's ZEW Indicator of Economic Sentiment rose 7.9 points to 34.2 in August, following a 15.8-point jump in July and comfortably beating market expectations of 30. The reading marked the highest level since February, before the Middle East conflict weighed on global confidence, suggesting that Germany's reform package is beginning to support the economic outlook.
The assessment of the current situation also improved, with the index rising 16.5 points to -61.1, while inflation expectations dropped 13.1 points to 1.8.
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