European shares slip on renewed US-Iran tensions

European shares opened lower on Monday, after sharp losses last week, as escalating hostilities between the United States and Iran prompted Tehran to close the Strait of Hormuz, rattling investors.

The pan-European STOXX 600 index .STOXX fell 0.3% to 639.29 by 0702 GMT, after registering its sharpest weekly loss since late-April on Friday.

The latest flare-up in the conflict raised fresh questions over the viability of a U.S.-Iran agreement reached last month, which aimed to restore traffic through the Strait of Hormuz and pave the way for further negotiations.

Oil prices rose over 4%, boosting energy stocks .SXEP on the STOXX 600 by 1.6%. O/R

Investors will also await the upcoming earnings seasons for signs corporate results can support equities, especially the tech sector where valuations run the risk of being stretched.

On Monday, the sector .SX8P came under pressure, falling 1.2%, tracking declines in Asian tech peers after South Korea's SK Hynix's Nasdaq debut on Friday, in which the world's leading AI memory chipmaker surged 12.8%.

Among individual stocks, Shares of Dulux paint maker AkzoNobel AKZO.AS rose 3% after Nippon Paint 4612.T offered to buy the firm's decorative paint business for €7.5 billion ($8.55 billion).

-Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Nivedita Bhattacharjee/Reuters