LONDON: European equities were a mixed bag on Tuesday (Jan 7) but oil prices declined as fears of a Middle East conflict abated and investors turned their attention back to US-China trade issues.
Positive US economic news also appeared to limit losses.
With few major developments in the crisis sparked by the killing of Qasem Soleimani last week, traders were able to focus on the global economic outlook and the US-China trade deal signing planned for Jan 15.
"In the eyes of investors, the US-China trade deal is more important than the US-Iran conflict," summed up Fawad Razaqzada, a market analyst at Forex.com.
'VERY LITTLE HAS CHANGED'
As European trading closed for the day, the stock indices in London and Paris were essentially unchanged, while Frankfurt had gained 0.8 per cent.
Wall Street's Dow index showed a slight loss of 0.3 per cent however.
Asian markets had been broadly higher earlier in the day, with Tokyo ending 1.6 per cent up, Hong Kong adding 0.3 per cent and Shanghai rising 0.7 per cent.
Oil prices declined, taking the share price of major oil companies with them.
In London, shares in BP ended the day 1.05 per cent lower at 195.50 pence, while Shell's "B" shares were down by 0.63 per cent at 2,299 pence.
Gold slipped from six-and-a-half-year highs, but nonetheless ended the day in Europe with a slight gain of 0.3 per cent
"Putting to one side the heat and noise of the events of the last few days, and in the absence of further violence and escalations, the reality is that very little has changed," concluded CMC Market analyst Michael Hewson.
GOOD US DATA
Meanwhile, a drop in imports cut the US trade deficit in November and put the country on track to post its first annual decline in six years, Commerce Department data showed.
The trade gap - the difference between what the United States buys from and sells to international trading partners - fell by 8.2 per cent in November to US$43.1 billion, lower than economists had expected and the lowest since October 2016.
With the drop likely to be trumpeted by the US administration as vindication of its hard line with China, "other countries are likely to be nervous that they could soon find themselves in the president's cross hairs," commented James Knightley at the Dutch bank ING.
Another bit of good news came from the Institute for Supply Management's services index, which added 1.1 point to 55 in December, putting the largest segment of the US economy solidly in growth territory.
Key figures at 1645 GMT:
London - FTSE 100: FLAT at 7,573.85 (close)
Paris - CAC 40: FLAT at 6,012.35 (close)
Frankfurt - DAX 30: UP 0.8 per cent at 13,226.83 (close)
EURO STOXX 50: UP 0.2 per cent at 3,759.25 points
Tokyo - Nikkei 225: UP 1.6 per cent at 23,575.72 (close)
Hong Kong - Hang Seng: UP 0.3 per cent at 28,322.06 (close)
Shanghai - Composite: UP 0.7 per cent at 3,104.80 (close)
West Texas Intermediate: DOWN 1.3 per cent at US$62.43 per barrel
Brent Crude: DOWN 1.3 per cent at US$68.02 per barrel
Pound/dollar: DOWN at US$1.3115 from US$1.3171 at 2200 GMT
Euro/pound: DOWN at 84.92 pence from 85.01 pence
Euro/dollar: DOWN at US$1.1138 from US$1.1197
Dollar/yen: UP at 108.60 from 108.37 yen