European Stocks Flat Amid US-Iran Tensions, Israel-Lebanon Ceasefire

European stocks struggled for direction early Thursday as tensions escalated between Washington and Tehran, even as a ceasefire was agreed between Israel and Lebanon on Wednesday evening.

Shortly after the opening bell, the pan-European Stoxx 600 was seen trading flat. London's FTSE 100 fell 0.2%, while France's CAC 40 added 0.3% and Germany's DAX added 0.2% in morning trade.

In corporate news, shares in Universal Music Group were seen down 7% following reports that Pershing Square had sold its stake in the group, after two failed takeover attempts.

UMG announced Thursday morning that it had repurchased over 14 million of its ordinary shares owned by various Pershing Square funds, worth 250 million euros ($289.9 million), as part of an existing 500 million euro buyback program.

The Wall Street Journal reported that Bill Ackman's hedge fund had sold its UMG stake worth over $1.5 billion at an estimated profit of $600 million.

Meanwhile, tensions between Iran and the U.S. on Wednesday sent Asian stocks lower overnight, and European equity markets look set to follow suit.

The Kuwait International Airport was struck by Iran early Wednesday, just a day after the U.S. Central Command said it had defeated multiple Iranian ballistic missiles and drones, as well as launching "self-defense strikes" on Qeshm Island in the Persian Gulf. This was in response to "attempted attacks" by Tehran, it said.

If necessary, Israel and the U.S. are prepared to strike Iran again, Israeli Prime Minister Benjamin Netanyahu told CNBC in an interview.

"Israel is ready and the U.S. forces are ready. I think Iran should take that into account. I think they are taking into account, but they're playing with fire," Netanyahu said.

Oil prices dipped slightly on the news that Lebanon and Israel have ​agreed to ​the implementation ​of a ceasefire, according to a joint statement with the United States ⁠released ‌by the State Department ⁠on Wednesday following negotiations in Washington.

The ceasefire is contingent on a complete cessation of ‌fire from the Iran-aligned Hezbollah militia and the evacuation of all its ​operatives from the South Litani Sector, according to the statement. The two sides had ⁠agreed last month to a ceasefire, but ‌hostilities had continued.