FRANKFURT: Europe’s main stock index closed flat after a volatile session on Wednesday as investors remained on edge over geopolitical tensions between Ukraine and Russia which continued to cast a shadow over the markets.

The pan-European STOXX 600 held its ground at 500.53 points. It declined for a fourth straight session - logging its longest losing streak in over two months.

It touched a three-month low on Tuesday amid an investor rush to safe-haven assets.

Ukraine fired a volley of British Storm Shadow cruise missiles into Russia on Wednesday, a day after it fired US ATACMS missiles upon approval to do so from the outgoing administration of US President Joe Biden.

Russia lowered its threshold for a nuclear strike, and Reuters reported Russian President Vladimir Putin’s openness to discuss a Ukraine ceasefire deal with US President-elect Donald Trump, provided it rules out major territorial concessions and that Kyiv abandons plans to join NATO.

Main bourses in Germany, France, and Spain, also gave up early gains and ended the session in the red.

The Euro STOXX volatility index closed at 20.06.

Automobile stocks led sectoral declines, falling 1.2%.

Rate sensitive real estate stocks were the biggest drag on the index, down 0.7%.

Euro zone negotiated wage growth accelerated in the third quarter, adding to the case for caution in cutting interest rates quickly as the labour market remains tight despite some signs of cooling.

“Europe’s been driven by the geopolitical uncertainty - fears of the conflict between Ukraine and Russia take a more dangerous turn after Ukraine struck twice inside the Russian territory, “ said Elias Haddad, senior markets strategist at Brown Brothers Harriman.

“You’ve also got sluggish euro zone growth outlook that’s also a big factor from a more cyclical perspective that is weighing on Europe.”

Focus is also on US President-elect Donald Trump’s administration appointments, including the search for a Treasury secretary.

Wall Street CEO Howard Lutnick will lead Trump’s trade and tariff strategy.

ArgenX gained 4% after the biotech company announced progress in the development of its flagship drug Vyvgart. It lifted the healthcare sector as well.

Keeping the technology index’s in the green was Sage Group’s 17.8% jump, after announcing better-than-expected annual operating profit and the software firm’s launch of a 400-million-pound share buyback.

The tech sector’s performance outlook also hinges on quarterly results from the world’s most valuable company Nvidia , seen as a barometer for the sector’s shift to AI, due after market close.

The ECB has warned about a “bubble” in AI-related stocks, which could burst abruptly if investors’ rosy expectations are not met.