European Stocks Gain More than 1%

European stocks moved higher on Wednesday, with the STOXX 50 rising 1.5% and the STOXX 600 gaining 1.2%, supported by a broadly positive market tone amid hopes that the conflict with Iran could ease soon. US President Donald Trump said Washington was negotiating with Tehran and suggested that Iran is willing to reach a peace agreement, although Iranian authorities have denied engaging in direct talks. Trump also noted that he had stepped back from his recent threat to order strikes on Iranian energy infrastructure “based on the fact that we’re negotiating”. Oil prices fell by around 6% in response. All sectors ended in positive territory, with industrials and technology stocks leading the gains. ASML Holding (2.7%), HSBC Holdings (1.8%), Novartis (1.5%), SAP (1.4%) were booking strong gains. Also, Grifols surged more than 7% to top the STOXX 600 after the company’s board approved an IPO of its US biopharma business, aiming to raise capital and reduce debt.

European equity markets were set for a higher open on Wednesday as optimism grew over a potential resolution to the Middle East conflict following reports that the US was pursuing talks with Iran. The New York Times reported that Washington had sent Iran a 15-point proposal to resolve the conflict, while Israeli media indicated that the US was seeking a one-month ceasefire to facilitate negotiations. Additional reports suggested that the US and regional mediators are discussing the possibility of holding peace talks with Iran as soon as Thursday, though they are still awaiting a response from Tehran. Oil prices declined on these developments, offering relief to equities that had been pressured by concerns over inflation and potential interest rate hikes. Meanwhile, investors will focus on UK inflation data and German business confidence figures. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures rose 1.1% and 0.9%, respectively.

European equity indices closed mostly higher on Tuesday as markets continued to assess how higher energy prices will impact the global economy. The STOXX 50 inched higher by 0.2% to 5,585 and the STOXX 600 rose a sharper 0.5% to 579. ASML was among the strongest performers of the session after SK Hynix announced plans to order $8 billion of lithography equipment from the Dutch manufacturer. Chemicals producers were also higher as European natural gas prices trimmed a portion of their surge this month, easing the tighter margins for the sector. Air Liquide and BASF rose 2.5% and 4%, respectively. Still, oil prices continued to rise as hostilities between Iran, Gulf countries, and Israel worsened. Banks fell further in the session on the worsening inflation outlook, with Nordea and ING sliding 2.4% and 1.4%, respectively. Preliminary data showed that Eurozone private activity rose at a softer pace in March, the first confirmation that higher energy prices from the war are denting output.