European stocks close mixed amid Hormuz uncertainty

European stock markets closed mixed on Monday as investors weighed improving economic sentiment against uncertainty over US-Iran diplomatic efforts and the reopening of the Strait of Hormuz.

The pan-European Stoxx Europe 600 edged up 0.03% to close at 660.45 points, remaining near record-high levels.

France’s CAC 40 rose 0.13% to 8,726.03, while Germany’s DAX 40 gained 0.02% to finish at 26,323.88.

In contrast, the UK’s FTSE 100 declined 0.35% to 10,862.50, while Italy’s FTSE MIB fell 0.1% to 53,663.88. Spain’s IBEX 35 was nearly flat, closing at around 20,173 points.

Energy shares outperformed the broader market as oil and natural gas prices rose amid concerns that disruptions to shipments through the Strait of Hormuz could persist.

European benchmark natural gas prices jumped about 8% as Iran and Oman remained short of reaching a final agreement on restoring normal shipping through the strategically important waterway.

The strait accounts for around 20% of global liquefied natural gas (LNG) supply, equivalent to approximately 110 billion cubic meters annually, according to the European Central Bank. A prolonged disruption could intensify competition between European and Asian buyers for available LNG cargoes.

Market sentiment received some support from economic data showing investor confidence in the eurozone returning to positive territory.

The Sentix Economic Sentiment Index rose 4 points to 0.9 in August, marking its fourth consecutive monthly increase. The expectations component edged up to 10.3, while the assessment of current economic conditions improved sharply but remained negative.

Investors are also awaiting eurozone labor market figures and US inflation data later this week for further signals on the interest-rate outlook.

The euro traded 0.1% lower against the dollar at $1.1547 as of 1645GMT.