European Shares Muted Amid Iran-Oman Talks and US Inflation Fears

European shares were muted on Wednesday as investors assessed talks between Iran and Oman over the Strait of Hormuz. A senior Iranian source said Tehran and Oman are working on details for an agreement on the waterway, which handles one-fifth of global oil and gas shipments.

Despite the talks, uncertainty remains, with Joost Van Leenders, a senior investment strategist at Van Lanschot Kempen Investment, stating that 'this (uncertainty) we see it more as a risk than something that we really incorporate in our forecasts.'

The reopening of the waterway depends on the U.S. meeting Iran's conditions.

U.S. inflation data showed a hotter-than-expected Personal Consumption Expenditure report, modestly increasing expectations for the Federal Reserve to hike rates in September.

European banks led gains with a 1% rise, as Deutsche Bank advanced 4.3% to reach its highest since July 2011, and Commerzbank gained 2.8%.