UPDATE 2-European shares hit near three-week low on Mideast impasse, mixed earnings

The war has roiled global markets, pushing crude prices higher and fuelling concerns ‌about inflation and growth, as the vital Strait of Hormuz remains choked. Investors will thus closely monitor this week's European Central Bank and Bank of England's meetings for cues on growth, inflation and outlook on interest rates.

European shares ended ‌near ​a three-week low on Tuesday as mixed corporate earnings, uncertainty over the Middle East conflict, and caution ahead of major central bank decisions later this week weighed on sentiment. The pan-European STOXX 600 ‌declined 0.4% to 606.58 points. Most major regional markets closed lower, with Frankfurt's DAX down 0.3%, its seventh consecutive session of declines and the longest such streak since 2024.

Hopes for renewed U.S.-Iran talks faded after officials in Washington indicated that President Donald Trump was dissatisfied ‌with Tehran's latest proposal to resolve the two-month-long war. The war has roiled global markets, pushing crude prices higher and fuelling concerns ‌about inflation and growth, as the vital Strait of Hormuz remains choked.

Investors will thus closely monitor this week's European Central Bank and Bank of England's meetings for cues on growth, inflation and outlook on interest rates. Market participants are also tracking how the Iran war is affecting companies' outlook as they report ⁠earnings. "We've rallied ​a very long way without ⁠a significant pullback and there is a danger if the central banks play up inflation and high energy costs and hint at rate hikes rather than ⁠keeping things on hold. That could be a trigger for a bit more of a selloff," said David Morrison, senior market analyst at Trade ​Nation.

Optimism surrounding technology and AI has helped Wall Street and other global markets rebound from a sharp selloff in March, ⁠but energy-dependent European equities still remain below pre-war levels. European tech stocks slid 1.9% on Tuesday, tracking losses on Wall Street amid growing scepticism on whether the ⁠AI boom ​would translate into growth.

Barclays pared earlier losses, ending 0.2% lower after the British bank flagged a $308 million hit linked to collapsed lender MFS. The broader banking index, however,gained 1.3%, helping curb losses on the STOXX index.

The energy index was up 0.6%, ⁠lifted by BP, which gained 1.1% after it beat first-quarter profit estimates. Meanwhile, a key ECB survey showed Euro zone consumers sharply raised ⁠their inflation expectations in March.

Among ⁠other movers, Norway's Telenor slipped 5.7% after posting first-quarter core earnings below expectations. Biotechnology company Qiagen slumped 10.8% after cutting its full-year earnings outlook.

Norwegian Air Shuttle climbed 5.9% after the budget airline reported ‌a lower-than-expected operating ‌loss.