April 20 (Reuters) - Futures tracking Europe's main stock indexes fell more than 1% on Monday, as hopes for peace in the Middle East ebbed with tensions reigniting after Washington seized an Iranian
European shares slide on concerns of US-Iran ceasefire collapse
Market Reactions and Sector Performance Amid Geopolitical Tensions
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.
Potential U.S.-Iran Talks and Regional Impact
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.
Market Indices Performance
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.
Investor Sentiment and Analyst Insights
"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.
Comparative Performance: Europe vs. U.S.
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.
Sector Highlights
Energy Sector Gains
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]
Travel, Leisure, and Other Sectors
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.
Policy Responses and Company News
European Union Initiatives
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.
Individual Stock Movements
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)
