April 7 (Reuters) - European shares were flat on Tuesday as escalating tensions in the Middle East and a looming deadline for peace talks kept investors on edge.
The pan-European STOXX 600 index was up 0.1% at 597.24 points by 0715 GMT. Major regional markets traded flat to higher, with Germany's DAX down 0.1%, while London's FTSE 100 up 0.1%.
Trading resumed after Europe's extended Easter weekend, which included the Good Friday and Easter Monday holidays.
The banking sector led gains, rising 0.7%,
while information technology sector lagged at the bottom.
ASML fell 4.2%. A cross-party group of U.S. politicians have proposed a law to impose further restrictions on exports of computer chipmaking equipment to China.
Markets have been on edge since the U.S.-Israel conflict with Iran erupted in late February. Tehran's effective closure of the Strait of Hormuz has stoked inflation concerns and rattled investor confidence.
Despite hopes for a diplomatic breakthrough, negotiations have so far failed to yield progress. U.S. President Donald Trump has imposed a deadline of 8 p.m. EDT Tuesday (0000 GMT Wednesday) for a deal to be reached, intensifying the pressure.
The uncertainty has triggered a risk-off sentiment across markets, sending oil prices surging and pushing European energy sector 0.8% higher. [O/R]
Among other stocks, Universal Music Group soared 15.4% after Pershing Square proposed a cash-and-stock takeover valued at about 55.75 billion euros ($64.31 billion).
Manufacturing data due later in the day could offer early insights into how the six-week conflict has impacted the European economy.
($1 = 0.8674 euros)
(Reporting by Ragini Mathur in Bengaluru; Editing by Nivedita Bhattacharjee)
