European stocks pause near record high as markets eye Middle East

Europe's benchmark stock index held near a record high on Monday as investors paused ahead of a week packed with economic data, while uncertainty surrounding the Middle East conflict kept oil prices elevated.

The pan-European STOXX 600 .STOXX was little changed at 660.45 points. The energy sector .SXEP led gains, rising 1.3%, as oil prices climbed for a fourth straight session.

Iran said the U.S. must meet several conditions before it reopens the Strait of Hormuz, while signalling it was close to an agreement with Oman on new shipping lanes through the waterway. The strait is a critical energy corridor for Europe.

"Markets are really just in a period of digestion and wait-and-see," said Kiran Ganesh, managing director, global head of investment communications at UBS.

Investors are also focused on euro zone employment data and U.S. consumer price figures due later this week for clues on the outlook for interest rates.

Softer-than-expected U.S. jobs data last week and strong corporate earnings on both sides of the Atlantic helped lift the STOXX 600 1.7% to a record high on Friday.

"Looking at corporate earnings, neither the crisis (in Middle East), nor tariffs, nor overshooting chip prices have derailed companies from doing good business," said Ipek Ozkardeskaya, senior analyst at Swissquote.

The basic resources sector .SXPP rose 0.9%, tracking firmer copper and precious metal prices, while technology shares .SX8P gained 0.3%.

By contrast, the telecoms sector .SXKP was the biggest decliner, falling 2.1%, as Deutsche Telekom DTEGn.DE and Vodafone VOD.L slipped 3.2% and 3.1%, respectively.

Media stocks .SXMP fell 1.6%, with Britain's biggest advertising group WPP WPP.L down 5% and French rival Publicis Group PUBP.PA losing 1.4%.

With the earnings season nearing an end, LSEG estimates show second-quarter STOXX 600 earnings are expected to rise nearly 21%, up from forecasts of about 12.5% in early May.

Plus500 PLUSP.L rose 2.1% after the trading platform reported higher half-year core profit, helped by increased trading activity as it expanded in the U.S. and rolled out more products.

Vistry VTYV.L dropped 12.2% after the Financial Times reported credit insurer Allianz was cutting cover for the affordable homebuilder's suppliers by up to 70%.

Coca-Cola HBC CCH.L fell 4.8% after BNP Paribas cut its rating on the bottler to "neutral" from "outperform".

($1 = 0.8659 euros)

-Reporting by Tharuniyaa Lakshmi, Ragini Mathur, and Utkarsh Hathi in Bengaluru. Editing by Harikrishnan Nair and Mark Potter/Reuters