European stocks lower as luxury slump weighs on sentiment

LONDON — European stocks turned negative on Wednesday as traders assess the trajectory of the U.S.-Iran war and the prospect of renewed peace talks.

The pan-European Stoxx 600 index was down almost 0.4%, by 3:45 p.m. in London (10:45 a.m. E.T.), as regional bourses and sectors painted a mixed picture.

European luxury brands pulled the French stock market into negative territory following a raft of disappointing earnings.

Kering plummeted to the bottom of the Stoxx 600 index movers, its shares tumbling 8.6% in afternoon trade, as sales of its largest brand, Gucci, fell below expectations. 

The company, which also owns brands Yves Saint Laurent, Bottega Veneta and Balenciaga, also said retail revenue in the Middle East declined by 11% in the first quarter, following growth over the first two months of the year.

Hermes shares plunged 8.6% as currency fluctuations weighed on the firm's sales figures. 

The retailer reported that currency fluctuations represented a "significant negative impact" on revenues of around €290 million ($295 million). LVMH and Christian Dior were also down as the news rippled across the sector.

The moves follow more positive sentiment in Asia-Pacific and U.S. markets overnight, with oil prices falling amid rising hopes of a diplomatic solution to the Middle East conflict.

A White House official told CNBC on Tuesday that a second round of negotiations between Washington and Tehran was under discussion. Nothing has been officially scheduled yet, the official said, who asked not to be named to discuss the administration's internal plans.

President Donald Trump later told the New York Post that fresh U.S.-Iran talks in Islamabad "could be happening over next two days."

Earnings came from ASML, Hermes International and Antofagasta on Wednesday. On the data front, EU industrial production figures are due later in the day.

— CNBC's Kevin Breuninger contributed to this market report.