European stock indexes gave up some recent gains on Tuesday and oil prices rose after new US strikes in southern Iran dampened investors' hopes that a US-Iran peace deal could be imminent.Market sentiment had turned more positive over the past week as traders bet on a de-escalation in the US-Israel war on Iran, which has severely disrupted Middle East oil and gas supplies since it began in late February.
But they readjusted this view on Tuesday after the US said on Monday it had carried out what it called defensive strikes in southern Iran. As talks continue, US Secretary of State Marco Rubio said on Tuesday negotiating a deal with Iran could "take a few days".
At 1051 GMT, the STOXX 600 was down 0.2 percent on the day, but still close to its highest since the war began. London's FTSE 100 was up 0.7 percent on the day, while Germany's DAX was down 0.5 percent. The MSCI World Equity Index was flat, but up 3.8 percent so far this month.
Peter Schaffrik, global macro strategist at RBC Capital Markets, said that uncertainty in the Middle East was weighing on markets.
"It went from agreement is near to everyone needs to sign the Abraham Accords to bombing, so it’s not entirely clear what’s going on there," he said, referring to US President Donald Trump saying on Monday he had told additional countries to sign the Abraham Accords as he tried to negotiate an agreement to end the war.
