European stocks edged lower on Thursday as investors assessed ongoing tensions in the Middle East and awaited upcoming talks between the US and China.
The pan-European STOXX 600 index fell 0.1% to 638.85 points, while most regional stock exchanges traded lower.
Investor sentiment remained cautious amid ongoing geopolitical tensions in the Middle East, keeping energy markets highly volatile.
Iranian officials held talks with US envoys on the sidelines of the UN General Assembly meetings, but both sides indicated limited progress toward ending the conflict.
Oil prices rose slightly as traders reassessed supply risks related to the conflict in the Middle East, while Brent crude futures held above $100 a barrel.
European energy stocks rose 0.3%, while airline and defense stocks led sectoral losses, weighed down by declines in Saab and Hensault shares.
Attention is also focused on the upcoming summit between US President Donald Trump and his Chinese counterpart Xi Jinping, amid hopes for progress in trade relations between the two countries.
On the individual stock front, shares of Shelley Group rose 6.2% after Schneider announced its intention to make a takeover bid of 1.2 billion euros, equivalent to 1.4 billion dollars, to buy the Bulgarian smart devices company.
Shares in H&M fell 2.5% despite the Swedish clothing company announcing that its operating profit for the period from June to August exceeded market expectations.
