European shares flat ahead of Nvidia earnings

By Tharuniyaa Lakshmi

Aug 26 (Reuters) - European ‌shares were largely ​flat ​on Wednesday as investors braced for Nvidia's earnings report, while hopes that the Strait of Hormuz may reopen soon pushed oil prices lower.

The ‌pan-European STOXX 600 was up 0.06% at 656.87, as of 0823 GMT, ⁠with luxury stocks leading sectoral gains, up 1.2%.

Investors await Nvidia's second-quarter earnings, due later in the ‌day, for clues on whether the ‌AI-driven spending boom can continue to justify lofty market expectations.

Analysts expect Nvidia to forecast an 82.8% rise in third-quarter sales to $104.20 billion. Adjusted gross margin for ​the second and third quarters is expected to remain around 75%.

Tech shares fell 1.1% ahead of the results.

Meanwhile, Iran said it had restarted talks with Oman ⁠on managing the Strait of Hormuz amid mounting pressure from U.S. President Donald Trump in the nearly six-month conflict that ​has roiled oil markets and stoked global inflationary worries.

Brent crude futures fell for a third straight day, dropping more than 2% to ​around $86 a barrel on prospects of increased oil ‌flows through Hormuz, helping drive bond yields lower. The energy index fell 1.2% and was the worst performing sector on the ⁠STOXX 600. [O/R]

Attention is also on a key U.S. inflation report due later in the day and Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday, as investors ⁠look for fresh clues on the U.S. interest rate path.

"We've got a lot of risk coming ​up and, while European markets won't be directly impacted by Nvidia's results or Kevin Warsh's speech, they will be indirectly affected," said Kathleen Brooks, research director at XTB.

In Europe, ECB policymakers are ‌ready to raise rates at the September meeting to counter the economic effects of the Iran war, though they are reluctant ‌to signal further tightening beyond that, three sources told Reuters.

Among individual stocks, SAP fell 4.2% ⁠and was the biggest drag on ‌the STOXX 600 after ​U.S. software maker Intuit issued a disappointing forecast, while UBS downgraded the German software group to "neutral".

(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by ‌Sonia Cheema)

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