European shares dip as Middle Eastern developments keep investors wary

* Europe plans to prioritise satellite spectrum for domestic ​firms

* BT falls ⁠on reports the UK plans to oppose billionaire Mittal ​raising his stake

* European defence shares gain

May 28 (Reuters) - European shares closed lower on Thursday, though they pared steeper ​losses ‌after a report on news outlet Axios said the United States and Iran had agreed to extend a ceasefire and begin negotiations.

The pan-European ⁠STOXX 600 fell 0.5% to 625.11 as major regional bourses also ⁠closed lower.

The reported deal, which would still require ​approval from U.S. President Donald Trump, helped to calm markets after Iran targeted a U.S. air base in Kuwait and Washington struck what it described as an Iranian drone complex near the Strait of Hormuz.

Crude prices, a concern for energy-dependent Europe, ​surged earlier in ‌the day before trimming gains. Brent crude futures were last up 0.3% at $94.68 a barrel.

"A lot of the good news around this has been priced in over the early part of the week," said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management. "The relatively muted reaction we've seen in markets to signs of a ceasefire reflects that."

Market analysts say better-than-expected ​corporate earnings have also supported equities since March's conflict-driven lows, though risks remain.

"If you look at what companies did with their ‌earnings, there were no real changes in guidance. The big uncertainty is how the consumer reacts to higher energy prices in the second half of the year," said James ‌Rutland, a fund manager at Invesco.

Next month's European Central Bank policy meeting will be the next big catalyst for the market. Rising energy prices and geopolitical uncertainty have clouded the central bank's rate outlook, with traders pricing in about 90% chances of ​a 25- basis-point rate hike.

Among Thursday's movers, financials led the losses. The banking and insurance sectors were down 1% and 1.9%, respectively. French semiconductor materials supplier ‌Soitec shot up 24.6% after reporting annual sales above market expectations. Peers, including Infineon and STMicroelectronics , added 4.4% and 3.2%, respectively.

Global uncertainty sparked by the U.S.'s shift in trade and security policy is pushing Europe to reduce its reliance on its longtime ⁠partner. Defence stocks ⁠Renk, up 5.4%, Rheinmetall, up 4.1%, and Saab, up 7.4%, rose as Canada ‌and Norway sought deals with European companies. Satellite companies such as Eutelsat rose 5.8% and OHB added 4.2%. Europe announced plans to allocate the bulk of valuable ​mobile satellite spectrum to European ​companies while reducing the share U.S. operators can acquire. Among the fallers, BT lost 3.4% ‌after a media report said the British government will oppose any attempt from Indian billionaire Sunil Bharti Mittal to increase his stake in the telecoms group, citing the need to maintain sovereign control over "critical national infrastructure". (Reporting by Johann M Cherian, Pranav Kashyap and Ragini Mathur in Bengaluru; Editing by Rashmi Aich and Barbara Lewis)

Soitec

STMicroelectronics

Eutelsat Communic.

BT