European Shares May Open Deep In Red As US-Iran Peace Talks Fail

(RTTNews) - European stocks may tumble at open on Monday as the failure of peace talks in Islamabad at the weekend raised concerns that the global energy crisis will deepen.

After negotiations ended without a deal amid unresolved disputes over Iran's nuclear program, U.S. President Donald Trump ordered blocking all ships trying to enter or leave the Strait of Hormuz, heightening fears of a prolonged conflict and disruptions to key energy supplies.

Trump announced that the United States Navy will block 'all maritime traffic entering and exiting Iranian ports' starting on Monday. "It's going to be all or none and that's the way it is," the president said.

Iran's navy chief asserted that the country is prepared to counter any military action and will not be intimidated by what it called "imaginary plans."

While both countries indicated that negotiations may continue, media reports suggest that sharp disagreements remain over nuclear commitments, Strait of Hormuz control, financial reparations, and ongoing Israeli attacks in Lebanon.

Investor attention may also turn to the start of start of first-quarter earnings season, with major U.S. banks, including Goldman Sachs, Bank of America, Wells Fargo, Citigroup, JPMorgan Chase and Morgan Stanley scheduled to report their earnings results this week.

Asian markets traded lower in cautious trade and gold dipped toward $4,700 an ounce as the dollar gained and global bond yields surged on inflation and interest-rate concerns.

Brent crude prices surged over 7 percent above $102 a barrel on concerns about further disruption to energy supplies from the Persian Gulf region.

U.S. stocks ended mixed on Friday but notched their biggest weekly gain since November ahead of Middle East peace negotiations in Islamabad.

Hours before the talks, President Trump warned that U.S. warships are being reloaded with ammunition to resume strikes on Iran in case peace talks in Pakistan fail.

In economic news, U.S. consumer sentiment tumbled to a record low in April amid concerns about the war with Iran and a surge in year-ahead inflation expectations, while headline consumer price inflation rose sharply by 3.3 percent year-on-year in March, reaching the highest level in nearly two years and matching economist estimates, separate reports showed.

While the tech-heavy Nasdaq Composite rose 0.4 percent, the S&P 500 slid 0.1 percent and the Dow dipped 0. 6 percent.

European stocks ended mostly higher on Friday as investors weighed the fragile ceasefire between the U.S. and Iran, alongside optimistic signals regarding potential peace negotiations in Ukraine.

The pan European Stoxx 600 gained 0.4 percent. The German DAX and the U.K.'s FTSE 100 finished marginally lower while France's CAC 40 added 0.2 percent.