European stock markets fell on Monday as optimism over a Middle East peace deal evaporated, with the ongoing closure of the Strait of Hormuz keeping investors on edge.
In London, the FTSE 100 dropped by 42 points, or 0.4%, to 10,626 points at the open, later closing down 58.5 points at 10,609. Germany's DAX fell 1.3% and Italy's FTSE Mib lost 1.1%. The pan-European Stoxx 600 was down 0.9% in late trading.
The oil price rose about 5.5% to $95.20 a barrel, reversing half of Friday's tumble, as Iran declared the strait closed despite earlier indications it had reopened. Chris Beauchamp of IG said Friday's euphoria had given way to confusion.
Anthony Willis of Columbia Threadneedle Investments noted that few ships passed through the strait, with some turning back after being fired upon. The US seized an Iranian vessel in the Gulf of Oman. The current ceasefire is due to end Wednesday, with uncertainty over peace talks.
President Trump said it was "highly unlikely" he would extend the ceasefire if no deal is reached. Iran reportedly has no plans to participate in new talks, accusing the US of violating the ceasefire.
In the US, the Nasdaq was down 0.55% after a 13-day winning streak, while shares in AST SpaceMobile fell 8% after a Blue Origin launch failed to place its satellite in the correct orbit.
