May 25 (Reuters) - European shares opened on Monday at their highest levels in more than two months, buoyed by signs that Iran and the United States were negotiating an end to their conflict, easing concerns about inflation and a global economic slowdown.
The pan-European STOXX 600 was up 0.61% at 628.93 points, as of 0712 GMT, trading just shy of a record high touched in late February, just before the Middle East war erupted.
Most sectors traded higher, led by banks with a 1.7% jump, while regional
airlines such as Lufthansa and Air France KLM gained 4.2% and 9%, respectively, as Brent crude prices slid 5% to $98 a barrel.
While U.S. President Donald Trump has warned that he was in no hurry to finalise a deal with Iran, investors seem to rely more on his Saturday statement that Washington and Iran had "largely negotiated" a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz.
Clarity remains limited on key issues dividing the adversaries, including Iran's nuclear programme.
One-fifth of the world's crude oil and natural gas passes through the strategic waterway and is also key for energy-dependent Europe. The STOXX 600 has lagged global peers on worries that higher crude prices could fan inflation pressures in the region.
Among single stocks, Delivery Hero
Trading volumes are expected to be light as markets in the U.S. and UK are closed on account of public holidays.
(Reporting by Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips)
