European stock markets close steady

The pan-European STOXX 600 index closed up 0.03% at 628.18 points after trading modestly higher earlier in the session and around 1% below its all-time high hit before the ​war began in late February

European stock markets closed little ​changed on Wednesday, holding near record levels reached before the Iran war began, as gains in automobile ‌and chemical stocks offset lingering concerns over the war and its potential impact on energy markets.

The pan-European STOXX 600 index closed up 0.03% at 628.18 points after trading modestly higher earlier in the session and around 1% below its all-time high hit before the ​war began in late February.

Markets took some comfort from a decline in oil prices, with Brent crude ​down 3.2%, even as investors continued to track mixed signals from Tehran and Washington.

Iran’s state ⁠TV said it had obtained a draft of an unofficial framework for an initial understanding between Iran and the U.S. to end the war. It said it included a provision for Tehran to restore shipments through the ​Strait of Hormuz to pre-war levels within a month, but the U.S. dismissed the report as false.

On Tuesday, Iran accused the U.S. of violating a ceasefire, raising new doubts over the durability of peace efforts.

Europe is more exposed than the U.S. to the economic ​transmission channel of the conflict, which is obviously related to energy, Luca Bindelli, head of investment strategy at Lombard ​Odier, said.

If we were to reach a deal, some of these concerns building around Europe would probably unwind, Bindelli said.

We would ‌not necessarily ⁠see the earnings picture improve materially in the immediate aftermath, but from a sentiment and multiples perspective, Europe could rebound, Bindelli said.

The European Central Bank also warned on Wednesday that the war and lingering trade tensions could hurt euro zone growth, ​raise borrowing costs and strain ​some member states’ public finances.