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European equities traded mostly lower on Monday as investors reacted to another setback in diplomatic efforts aimed at ending the prolonged conflict between the United States and Iran.
Tensions escalated after U.S. President Donald Trump rejected Iran’s latest proposal to resolve the conflict, which has now lasted for more than two months. In response, Tehran signalled it would continue to rely on both diplomacy and military measures when necessary to defend its national interests.
Iranian Foreign Ministry spokesperson Esmaeil Baqaei said the United States had breached trust in every diplomatic initiative it had participated in during the past two decades.
Major European Indexes Move Lower
By midday trading, the U.K.’s FTSE 100 Index remained broadly flat, while Germany’s DAX Index declined 0.5% and France’s CAC 40 Index fell 1.1%.
Investors continued to monitor geopolitical developments alongside a series of corporate earnings updates and company-specific announcements across Europe.
Safestay Shares Sink Following Management Change
Shares in hostel operator Safestay (LSE:SSTY) dropped sharply after the company announced that Peter Zielke would step down from his executive responsibilities as Chief Operating Officer effective June 10.
The company confirmed that Davide Caschili will assume the COO role from the same date.
Adesso and Hannover Re Decline After Earnings Updates
German IT services company Adesso (TG:ADN1) also moved lower despite reporting first-quarter profits that exceeded analyst expectations.
Meanwhile, reinsurer Hannover Re (TG:HNR1) declined after posting first-quarter earnings that came in below market forecasts.
Stabilus, Compass Group and Aurubis Advance
On the positive side, German automotive supplier Stabilus (TG:STM) gained ground after reaffirming its full-year financial guidance.
Compass Group (LSE:CPG) shares also advanced after the catering giant upgraded its 2026 profit outlook following a 12% increase in underlying operating profit for the six months ended March 2026.
Copper producer Aurubis (TG:NGA) surged after reporting stronger second-quarter performance and raising its outlook for the 2025-26 financial year.