The pan-European Stoxx 600 advanced 0.34% to 608.99

European stocks closed higher on Monday as Iran said it had responded to a US peace proposal, easing some tensions after US president Trump again threatened to resume strikes if a deal is delayed.

The pan-European Stoxx 600 advanced 0.34% to 608.99.

Germany’s DAX added 1.24% to 24,247.58, France’s CAC 40 increased 0.44% to 7,987.49, and London’s FTSE 100 rose 1.26% to 10,323.75.

Chris Beauchamp, chief market analyst at IG, said stock markets had swerved a sell off yet again thanks to some positive noises in US-Iran talks.

It has been another of those odd ‘stocks up, oil up’ days that have become such a feature of the global financial markets since the beginning of March, he said.

After looking decidedly weak this morning, rescue arrived in the form of signs that the US and Iran were once again talking, and that, even more importantly, a small unthawing of relations was underway, he said.

For two such implacable foes, the signs that they are capable of making concessions in pursuit of a deal is just what markets need to see, and investors grabbed the opportunity with both hands, he added.

On the economic front, UK house prices rose in May as confidence in the market remained “surprisingly strong”, according to Rightmove.

Average new seller asking prices rose 1.2% month-on-month to £378,304, after a 0.8% increase in April, beating the typical 10-year May increase of 1%.

Prices were down 0.3% year-on-year, an improvement from April’s 0.9% decline.

Colleen Babcock, property expert at Rightmove, said activity was staying steady despite cost-of-living pressures and global uncertainty.

What’s notable this month is that activity in the market is staying fairly steady, even with ongoing cost-of-living pressures and wider global uncertainty, she said.

Matt Smith, Rightmove’s mortgage expert, said small falls in mortgage rates and greater lending flexibility were helping buyers, particularly first-time buyers, make the numbers work.

UK consumer confidence meanwhile dropped to its lowest level since July 2023 as households became more worried about prices and interest rates.

The S&P Global UK consumer sentiment index slid to 42.1 in May from 42.3 in April, its third straight decline.