European shares slide on concerns of US-Iran ceasefire collapse

By Ragini Mathur, Utkarsh Hathi and Twesha ‌Dikshit

April 20 (Reuters) - European ​shares ​declined on Monday, following a sharp rebound in the previous session, as investors awaited progress on possible U.S.-Iran talks ahead of the expiry of the two-week ceasefire.

Iran was ‌considering attending peace talks in Pakistan, a senior Iranian official said, following ⁠Islamabad's attempts to end a U.S. blockade of Iran's ports, a major hurdle for Iran to rejoin peace efforts.

The ‌pan-European STOXX 600 index closed down ‌0.8% at 621.46 points. Other major regional markets also fell, with France's CAC and Germany's DAX down 1.1% each.

"European investors are looking at very obvious facts of higher oil and ​more uncertainty about products flowing out of the Persian Gulf ... so there is a clear concern that's being expressed in European shares," said Steve Sosnick, chief market analyst at Interactive ⁠Brokers.

The move comes after Friday's optimism, which saw the STOXX 600 jump more than 1% to post its fourth straight weekly ​rise after Iran declared the Strait of Hormuz open.

European equities have lagged their U.S. counterparts since war erupted at the end of February, as ​elevated oil prices weigh heavily on the energy-dependent region, ‌keeping investors on edge.

"European equities haven't done poorly, they're lagging behind the U.S. peers as the U.S. is simply better positioned to weather the ⁠current crisis with less economic damage than Europe," said Daniela Hathorn, senior market analyst at Capital.com.

Energy shares gained 1.6% as crude prices surged. British majors BP and Shell and France's TotalEnergies gained between 1.8% and 2.9%. [O/R]

On ⁠the flip side, the travel and leisure sector led declines with a 2.4% fall, bearing the brunt of ​higher energy costs and rising geopolitical tensions.

Airline stocks, including easyJet, Lufthansa, Ryanair and IAG, slid between 2.2% and 3.1%.

Aerospace and defense shares also weighed on the index, with Rolls-Royce and Safran down 3.7% and 3.9%, respectively.

Banks ‌and luxury stocks dropped about 2% each.

Meanwhile, Spain's energy minister said the country would actively participate in a potential European Union plan to ‌share jet fuel stocks and sees joint purchases as an option.

Among other shares, Renishaw rose 6.2% after the ⁠engineering firm raised its 2026 revenue ‌and profit forecasts.

Loomis fell 5% ​after Goldman Sachs downgraded the cash logistics company's shares to "neutral" from "buy".

(Reporting by Ragini Mathur, Twesha Dikshit and Utkarsh Hathi in Bengaluru; Editing by Mrigank Dhaniwala and ‌Keith Weir)

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