European stock markets recouped some of their losses in late trading, buoyed by gains in financial and energy producer shares. Hungarian equities climbed following a decisive electoral victory by political newcomer Márton Gyöngyösi. The Europe Stoxx 600 index closed largely unchanged after having fallen as much as 1% earlier in the session. A basket of European airline stocks compiled by UBS declined as Brent crude prices rose. Energy stocks were the top performers, with Shell gaining over 1%. Former US President Donald Trump stated that any Iranian vessels approaching US blockade lines would be immediately destroyed. This comes after weekend talks between the US and Iran in Pakistan, described as marathon negotiations, failed to yield an agreement. Gilles Guibout, head of European equities at BNP Paribas, commented, "Without a sustainable crisis resolution, it is difficult to envision how markets can achieve a lasting rebound." Hungary's benchmark stock index surged 5% to a record high after long-time Prime Minister Viktor Orbán was defeated in the election by an emerging opposition party. This historic vote concluded his 16-year tenure. Strategists at Morgan Stanley indicated that the election outcome carries "underestimated spillover effects" for developed markets in Europe. The beginning of the European earnings season is overshadowed by geopolitical deadlock. Sales at LVMH's core fashion and leather goods division declined at the start of the year, as conflict in the Middle East dampened demand for Louis Vuitton and Dior products. Industry research strategist Laurent Douillet suggested that the current forecast of 10.4% earnings per share growth for the Stoxx Europe 600 index by 2026 is overly optimistic. He cited contributing factors including tariff pressures, rising unemployment, weakening consumer confidence, and accelerating inflation.