- BP gains on strong Q1 performance
- Novartis slips after quarterly results miss estimates
- Euro zone consumers raise inflation expectations - ECB survey
April 28 (Reuters) - European shares were muted on Tuesday as investors braced for a week packed with central bank meetings and corporate earnings, while weighing a diplomatic impasse in U.S.-Iran negotiations.
Investor caution increased after U.S. officials indicated that U.S. President Donald Trump was dissatisfied with Iran's latest proposal on resolving the two-month-long war. The latest proposal sought to postpone a discussion on Iran's nuclear programme until the war concludes and shipping disputes are resolved.
The pan-European STOXX 600 was flat at 609.63 points, by 0832 GMT. Most major regional markets were higher with Spain's IBEX 35 and UK's FTSE 100 adding 1% and 0.3%, respectively.
The war has roiled global markets, driving oil prices higher and reigniting concerns over global inflation and growth, with the vital Strait of Hormuz remaining closed.
Optimism surrounding technology and AI has helped Wall Street and other global markets rebound from a sharp selloff in March, while energy-dependent European stocks lag below pre-war levels.
"The current markets are pretty precariously positioned in that sentiment could easily turn negative quickly. The Iran war isn't over," said Michael Field, European equity strategist at Morningstar. "Inflation is still coming through. And as and when central banks start raising interest rates again, which again seems to be priced in the moment ... that might be the catalyst for investors to reverse some of that positivity they have towards markets.
Corporate earnings remain in full swing with investors closely tracking the impact of the Iran war on company results and outlook.
Healthcare stocks dropped 1.2%, dragged down by a 2.4% fall in Novartis after the Swiss drugmaker reported quarterly core operating profit and sales below market estimates.
Shares of British lender Barclays shed 3% as a $308 million hit linked to collapsed lender MFS offset a first-quarter profit in line with expectations.
The broader banking index, however, added 0.8%.
Shares of BP gained 2.5% after the energy giant posted first-quarter profit above expectations. The energy index was up 1.4%.
With the European Central Bank and Bank of England due to meet this week, investors will monitor guidance on growth and inflation for hints on rate hike expectations.
A key ECB survey showed Euro zone consumers sharply raised their inflation expectations in March.
Among other movers, Norwegian Air Shuttle climbed 5.7% after the budget airline reported a lower-than-expected operating loss.
Telenor shares slumped 7.5% after Norway's leading telecom operator posted first-quarter core earnings below expectations.
Reporting by Twesha Dikshit; Editing by Sherry Jacob-Phillips and Sonia Cheema
Source: Reuters