The Swiss main index declined 0.8%, while Germany’s DAX shed 0.2%

European shares closed flat on Monday as rising oil prices following renewed U.S.-Iran tensions fuelled inflation worries, offsetting stronger-than-expected euro zone economic data.

The pan-European STOXX 600 closed at 649.9 points.

The Swiss main index declined 0.8%. Heavyweight Novartis dropped 3.2% after its cholesterol drug ​failed in a closely watched study.

Germany’s DAX shed 0.2%. Over the weekend, the country’s far-right AfD topped a state ​election in Saxony-Anhalt with 44% of the vote, dealing a major blow to Chancellor ⁠Merz.

It remains unclear whether the AfD can form a government for the state as it fell short of ​an absolute majority. The party advocates tougher immigration curbs and a withdrawal ​from the euro.

The AfD’s historic Saxony-Anhalt victory has nudged the DAX lower, but the muted reaction suggests investors see the result as a political warning rather than an immediate economic threat, Axel Rudolph, chief technical analyst at IG, said.

Fiscal concerns ahead of ​next year’s election sent French stocks to two-month lows last week. The stock index was up 0.3% on Monday.

Energy ​shares added 1.2%, tracking higher oil prices. Brent crude futures hovered near six-week highs and moved closer to $100 a barrel as strikes ‌on vessels ⁠in the Strait of Hormuz and elsewhere heightened fears of prolonged supply disruptions.

Data offered some support for the regional economy. Euro zone investor morale rose to its strongest reading in more than four years in September, while second-quarter GDP expanded 0.6% from the previous quarter and 1.2% year on year, both above expectations.