European shares closed flat on Monday as ​oil prices rose following renewed US-Iran tensions which fuelled inflation worries, offsetting stronger-than-expected euro zone economic data.

Tit-for-tat strikes between the US and Iran on vessels sailing in the Strait of Hormuz and other areas kept crude ​oil flows low.

Trading volumes were thin, with US markets closed for a public holiday.

Dublin

The Irish index of shares fell almost 1 per cent on Monday, with market heavyweights dipping lower over the day.

Food group Glanbia declined 3 per cent on Monday, while Kerry Group saw its shares fall 1.6 per cent with volumes lower than average.

Banking stocks were also off the pace, with AIB down half a per cent and Bank of Ireland down almost 0.4 per cent.

Shares in Ryanair also fell during the opening session of the week, with the stock dipping to €22.75 by the close of the market. That was 2.4 per cent lower on the day.

Construction stocks were mixed, with home builders Cairn and Glenveagh shedding value, while property investment company Ires REIT was marginally higher.

On the more positive end of the market, insulation specialist Kingspan rose 0.8 per cent, and ferries group Irish Continental saw its stock increase 0.8 per cent. The group is facing a crucial vote this week on a €1.2 billion bid to take the ferry operator private. But it is facing opposition from a number of major shareholders.

London

London’s benchmark FTSE 100 slipped as rising ‌oil prices and prospects of an interest rate hike by the US Federal Reserve weighed on markets, ‌while gains in energy stocks limited overall declines.

The blue-chip FTSE 100 index closed 0.1 per cent lower at 10,822.13 points. ​The midcap FTSE 250 also slipped 0.3 per cent.

Most sectors on the FTSE 100 were lower on Monday, with the consumer-facing personal care, drug and grocery and ⁠beverages sectors down 0.9 per cent and ​1.3 per cent respectively.

Energy stocks got the biggest ​boosts, with BP and Shell up about 1 per cent each.

Standard Life gained 2 per cent after the insurer posted better-than-expected profit for the first half.

Emerging markets-focused ‌asset manager Ashmore ended 1 per cent ⁠higher after it reported a 17 per cent jump in annual profit but narrowly missed analyst forecasts.

Europe

European shares were flat on Monday, with the pan-European STOXX 600 ending at 649.9 points and Germany’s DAX down 0.2 per cent following far-right AfD topping a state election in Saxony-Anhalt.

Meanwhile, fiscal concerns ahead of next year’s election sent French stocks to two-month lows last week. ‌The stock index was up 0.3 per cent on Monday.

Heavyweight Novartis fell 3.2 per cent after its cholesterol drug failed in a closely watched study.

Energy shares ​gained 1.2 per cent, tracking higher oil prices.

The higher oil prices have fuelled inflation concerns, triggering a global bond sell-off last week and strengthening the case for further policy tightening.

The European Central Bank (ECB) is widely expected to raise rates by 25 basis points ‌on Thursday, while US CPI ⁠data this week comes into focus after a strong jobs report boosted expectations of a rate hike by the Federal Reserve this month.

Deutsche Bank now expects the ECB to follow a September move with ‌an additional quarter-point increase in December.

Among other stocks, Italy’s Lottomatica rose 7.7 per cent after the betting company ​provided further details on how its proposed merger with Spain’s Cirsa would boost its online business. Cirsa shares rose 6.1 per cent.

New York

US markets were closed for a public holiday. – Additional reporting: Reuters