Europe close: Stocks end flat as miners slump

The benchmark Stoxx 600 index closed steady at 638.68, Germany’s DAX fell 0.1% to 25,374.42 and France’s CAC 40 ended flat at 8,078.48. At the same time, Brent crude was 3.2% higher at $107.67 a barrel and West Texas Intermediate was up 3.3% at $95.47 after US President Donald Trump rejected an Iranian proposal for a seven-day truce that would have led to the reopening of the Strait of Hormuz.

Conditions of the Iranian proposal included the US release of frozen Iranian funds, the lifting of oil sanctions and an end to its naval blockade on Iranian ports. According to the Wall Street Journal, Trump not only rejected the plan but said he also expects to resume bombing Iran after November’s mid-term elections.

In UK equity markets, housebuilders surged on news there would be a new scheme to help first-time buyers. The Your First Home scheme will enable purchases of newbuild properties with a deposit of 2.5% and a government-backed equity loan worth 20% of the property’s value. Barratt Redrow, Persimmon, Taylor Wimpey and Bellway all shot higher.

Energy stocks were also on the rise, with Stoxx 600 oil and gas index ending up 0.8%. The Stoxx 600 index for basic resources closed down 1.3%, however, as copper and gold prices fell.

Russ Mould, investment director at AJ Bell, said: "Gold prices have slumped from their summer highs as investors have reacted to the stronger dollar - which makes the metal more expensive for non-dollar buyers - as well as to rising bond yields and the shifting trajectory of interest rates. Because it offers no income, gold can lose its shine when alternative asset classes are offering more generous returns.

"Other parts of the mining sector were down in the dumps as industrial metals prices also slipped back."

Elsewhere, Italian iron and steel factory equipment maker Danieli tumbled as it full-year earnings fell short of expectations.