Amid persistent Middle East concerns, the Dax failed to sustain its pre-market gains on Monday. The German benchmark index opened virtually unchanged at 24,274.50 points. The Iranian military has warned U.S. forces against operations in the Strait of Hormuz. U.S. President Donald Trump had announced that, starting Monday, the U.S. would escort stranded vessels from neutral countries through the Strait of Hormuz.

Oil prices rose by approximately one percent following Iran's reaction, after having lost roughly the same amount earlier in the morning. 'In the short term, investors are drawing strength from the fact that while oil prices recently climbed to 120 dollars, they have not broken above this price ceiling that has held since the start of the conflict,' said Jochen Stanzl, chief analyst at Consorsbank. 'Markets seem to accept a price oscillation between 100 and 120 dollars.'

The latest peace proposal from Iran is also under scrutiny. Iranian state television reported on Sunday that the U.S. response to the 14-point plan is being reviewed in Tehran. However, Trump stated on Saturday that he could not imagine the Iranian proposal being acceptable.

In terms of individual stocks, the automotive industry was in the spotlight. Shares of BMW, Mercedes-Benz, and Volkswagen shed between 1 and 1.5 percent. Continental, trading ex-dividend, dropped four percent. On Friday, the U.S. President announced an increase in U.S. tariffs on cars and trucks from the EU from 15 to 25 percent.

(Report by Sanne Schimanski, edited by Christian Götz. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)