European shares slip as oil rises; Trump-Xi talks eyed

By Reuters News

By Sudeshna Ghoshal

Sept 24 (Reuters) - European shares fell on Thursday as oil prices resumed their rise on faltering US-Iran negotiations, keeping euro zone bond yields near multi-year highs.

The pan-European STOXX 600 .STOXX slipped 0.59% to 636.15 points by 0817 GMT. Most regional bourses also traded in negative territory.

Iranian officials communicated with US envoys on the sidelines of the UN General Assembly, but both sides signalled little progress toward ending the conflict.

"I wouldn't hold my breath for any quick resolution to the Middle East standoff. Both parties are quite intransigent, and their differences are irreconcilable," said Yasser El-Shimy, senior investment analyst at The Motley Fool.

Oil prices rose for a second day after falling for five sessions, with Brent crude holding above the key $100-per-barrel level. O/R

"Oil volatility is likely to continue in the near term. You have positives like the Saudi Arabia oil pipeline, which is opening up, but it's not all perfect at the moment," said Gordon Kerr, European macro strategist at KBRA.

European energy shares .SXEP were among top gainers, up 0.84%.

Germany's 10-year government bond yield , the benchmark for the euro zone, was steady at 3.547%, just below a 17-year high reached last week as elevated oil prices strengthened the case for further monetary tightening from the European Central Bank.

HOPES FOR PROGRESS AT TRUMP-XI TALKS

Investors are hoping for some progress from a Washington summit between US President Donald Trump and Chinese President Xi Jinping. US Treasury Secretary Scott Bessent said the two countries had agreed to extend their trade truce to January 10.

The two leaders are expected to speak on a raft of issues, from Taiwan and Iran to concerns over AI.

Back in Europe, aerospace and defence stocks .SXPARO led sectoral declines, with Saab SAABb.ST and Hensoldt HAGG.DE among the biggest drags.

Among individual stocks, Shelly Group gained 4.4% after Schneider SCHN.PA said it intends to launch a €1.2 billion ($1.4 billion) takeover bid for the Bulgarian smart-device maker.

Vistry VTYV.L shed 9% after the British homebuilder lowered its annual profit expectations amid a strategic overhaul. Britain's FTSE .FTSE was a shade lower, at 10,689.83 points.

Shares in H&M HMb.ST fell 3% despite the Swedish fashion retailer reporting a bigger-than-expected rise in June-August operating profit. Since Daniel Erver became CEO in January 2024, H&M's profitability has improved, though investors await stronger sales growth amid intense competition.

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