European equity markets opened in negative territory on Monday, with the FTSE 100 and other major indices trading lower despite fresh reports suggesting a diplomatic breakthrough in Iran.
The market’s reaction underscores the lingering risk premium attached to Middle Eastern tensions, as investors remain skeptical that early diplomatic signals will quickly translate into stable shipping conditions.
The decline follows a weekend of mixed messaging.
While US officials indicated there are "good foundations" for a potential deal with Iran, the broader market sentiment remains cautious.
This comes after previous reports highlighted threats from US President Donald Trump to "take over" Iran following the closure of the Strait of Hormuz, which had already weighed heavily on investor confidence.
The FTSE 100’s slide is part of a broader European sell-off, with the Stoxx 600 and Germany’s DAX also opening lower.