European shares were subdued in early trading on Monday as investors assessed a fresh round of corporate earnings amid political turmoil in France, while declining oil prices offered some relief on hopes of de-escalation in the Middle East conflict.
The pan-European STOXX 600 index was flat at 636.26 points by 0809 GMT, after recording its steepest weekly decline since early September on Friday.
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Oil prices retreated after climbing to near six-month highs last week, as hopes of easing tensions between the United States and Iran improved investor sentiment. Senior officials from Saudi Arabia, Turkey and Pakistan, members of the Mecca Pact, were also scheduled to meet Iranian leaders in Tehran on Monday.
The decline in crude prices weighed on energy stocks, with the broader European energy sector falling 0.7%.
Travel and leisure stocks outperformed, rising around 1%, as lower oil prices eased concerns over fuel costs and provided support to the sector.
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Investors also assessed a fresh batch of corporate earnings and company updates for indications of business conditions and the outlook for European companies.
Portugal's Galp Energia reported a 68% increase in adjusted net profit for the third quarter on Monday, beating market expectations. Despite the stronger-than-expected results, the company's shares fell 8.5% in early trading.
Meanwhile, shares of technology services provider Computacenter rose 6.8% after the company raised its annual profit guidance, signalling confidence in its earnings outlook.
European markets were also navigating uncertainty stemming from political developments in France, with investors balancing corporate earnings against geopolitical risks and movements in energy prices.
With oil prices and developments in the Middle East remaining key market drivers, investors are likely to monitor geopolitical signals alongside corporate results for further direction.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)
