European shares muted as investors assess US-Iran talks

EUROPEAN shares were muted at open on Wednesday (Jun 24), as investors assessed developments in the US-Iran negotiations, while defence company Rheinmetall dropped after a media report that Germany is set to scrap plans to build its biggest warship since World War Two.

The pan-European Stoxx 600 index edged 0.02 per cent lower to 634.50 points by 0715 GMT.

Crude prices were trading near US$76 a barrel, at early-March levels, on hopes that oil tankers stranded in the Gulf will move out of the Strait of Hormuz following a peace deal between Washington and Teheran.

However, caution prevailed amid disagreement between both countries on the key terms of the deal.

Traders were also watching for cues on the monetary policy path for major global central banks, as they priced in another 25 basis point interest rate hike by the European Central Bank by year-end, according to LSEG-compiled data.

On the Stoxx 600, the aerospace & defence sector led declines, falling 1.7 per cent, as German defence group Rheinmetall slipped 12.3 per cent after a report said that the country is set to scrap plans to build its biggest warship since World War Two and intends to buy eight smaller frigates from rival TKMS. TKMS shares jumped 8.7 per cent.

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The real estate sector gained the most on the benchmark, rising 2.4 per cent, with Segro climbing 17 per cent after US-based Prologis took its US$16.6 billion bid public after the UK warehouse landlord rejected the bid.

The tech sector recovered and was up 0.3 per cent after recording its biggest single-day drop in nearly five months in the previous session, as memory stocks in Asia rebounded, with South Korean shares rallying 3.3 per cent.

Chipmaker Infineon rose 0.9 per cent, and chip-equipment suppliers BE Semiconductor and ASML added 0.4 per cent each. REUTERS