European markets finish lower amid Iran peace talks uncertainty

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A screen displays a portrait of Iran’s new supreme leader Mojtaba Khamenei during the funerals of Iran’s Revolutionary Guards Corps (IRGC) commanders, army commanders and others killed in the early days of the United States and Israeli strikes on Iran, at Enghelab Square in Tehran on March 11, 2026.

Atta Kenare | Afp | Getty Images

LONDON — European stocks ended lower on Thursday, erasing the previous day’s gains as investors struggle to decipher mixed messages on the status of Middle East peace talks.

The pan-European Stoxx 600 closed the session 1.2% lower, with all major bourses and most sectors in the red.

Miners and technology stocks led declines, with the sectors falling 3.4% and 2.3%, respectively, as risk-off sentiment returned to markets.

In corporate news, British retailer Next reported strong full-year earnings on Thursday and raised guidance, while warning investors that instability in the Middle East could “restrain growth” in its overseas markets should the conflict persist. Its shares closed 4.2% higher, placing the company at the top of London’s FTSE 100.

“It is also likely to have knock-on effects on costs, selling prices and consumer demand in the rest of the business,” wrote chief executive Lord Wolfson in its latest earnings report.

While Next’s first-quarter sales were described by the CEO as “encouraging,” its European rival Hennes & Mauritz announced subdued sales figures during the first three months of 2026.

Citi analysts described current trading as “slightly weaker than anticipated.” H&M’s Stockholm-listed shares closed more than 2% lower.

Global markets have been reacting to contradictory statements from Washington and Tehran over the last 48 hours regarding the status of peace talks. The U.S. says talks over a proposed peace plan have been taking place, while Iran denies any direct interaction with Washington on the matter.

Iranian Foreign Minister Abbas Araghchi reportedly told state media on Wednesday that officials were reviewing an American proposal to end the war, but said Tehran had no intention of having talks with the U.S.

He added that an exchange of messages between the two countries through mediators “does not mean negotiations with the U.S.,” Reuters reported.

Iran state media reported Wednesday that the Islamic Republic would reject a U.S. ceasefire offer, instead countering with its five-point list that would give Tehran control over the Strait of Hormuz.

Asia markets were mixed in overnight trading, while on Wall Street, U.S. equity markets slid on Thursday.

European markets are keeping a close eye on news from the meeting of G7 foreign ministers taking place in France on Thursday and Friday. The wars in Iran and Ukraine will be top of the agenda. Delegations from Saudi Arabia, Brazil, India, South Korea and Ukraine will also be in attendance.

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