European Stocks Renew Record Highs

European stocks edged higher on Thursday, with the STOXX 50 rising 0.4% and the STOXX 600 gaining 0.2%, as investors continued to monitor developments in the Middle East, where reports suggest the US and Iran are considering a two-week extension of the ceasefire to allow more time for peace negotiations. The current truce is set to expire next week. However, shipping through the Strait of Hormuz remains suspended, with the US naval blockade still in place. Attention also turned to corporate earnings. ASML shares climbed more than 2%, supported by strong results from key customer TSMC. SAP (+0.8%) and Prosus (+2%) also posted gains, while Tesco surged over 3% after reporting robust underlying performance. On the downside, TotalEnergies slipped 0.5% despite indicating a solid Q1 and Pernod Ricard declined 1.4% after warning that disruptions linked to the Middle East war could lead to an annual sales drop of up to 4%.

European equity markets were poised for a firmer open on Thursday, tracking gains across global markets as optimism over renewed US-Iran negotiations and the prospect of a broader peace deal boosted sentiment. Reports indicated Washington and Tehran are considering extending their two-week ceasefire to allow more time for discussions, even as the Strait of Hormuz remains effectively closed under a dual blockade. Strong corporate earnings and a rebound in technology shares also supported the upbeat tone in global equities. In Europe, investors will focus on the UK’s monthly GDP data for February, alongside final March inflation readings for the Eurozone and Italy. On the corporate side, earnings releases are expected from Tesco, Pernod Ricard, and Viscofan, among others. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both higher by around 0.2%.

The Stoxx 50 fell 0.7% on Wednesday, led lower by ASML Holding which dropped more than 4% after issuing a weaker than expected outlook for the current quarter despite raising its full year sales forecast. The company expects second quarter revenue between €8.4 billion and €9 billion, below analyst expectations. The broader Stoxx 600 slipped 0.4% as weakness in the luxury sector weighed on sentiment. Hermès shares plunged 8% as Middle East tensions hit sales growth, while Kering dropped 9% after reporting disappointing results at Gucci, partly attributing the slowdown to the conflict. Investors remained cautious as they awaited clearer developments in the Middle East, with markets watching for confirmation of renewed talks and a possible extension of the ceasefire.