Stocks in Euro Area Hit 4-week High

European stocks rallied sharply on Wednesday, led by a near 5% surge in the STOXX 50 and a 3.6% gain in the STOXX 600, which climbed to its highest level in roughly a month. The advance reflected a broadly optimistic market sentiment after the US and Iran agreed to a two-week ceasefire, just as the deadline set by President Trump was about to expire. Iran also announced that safe passage through the Strait of Hormuz would be guaranteed during this period, easing concerns over supply disruptions. As a result, oil prices plunged by around 15%. Gains were widespread across all sectors, with consumer cyclicals and technology stocks leading the rally. Antofagasta (12.4%), ArcelorMittal (12%), Lufthansa (11.5%) and ThyssenKrupp (10.5%) were among the top performers. ASML Holding (8.2%), LVMH (6.8%) and L'Oreal (3.9%) were also sharply higher. In contrast, energy stocks fell sharply, including Eni (-8.4%), Repsol (-8.8%), BP (-7.7%), Shell (-6.9%) and TotalEnergies (-6.6%).

EU50 increased to 5913.00 Index Points, the highest since March 2026. Over the past 4 weeks, Euro Area Stock Market Index (EU50) gained 3.95%, and in the last 12 months, it increased 27.86%.

European equity markets were set to open sharply higher on Wednesday after the US, Iran and Israel agreed to a two-week ceasefire to allow negotiations for a potential deal to end the war. President Donald Trump delayed planned strikes on Iranian civilian infrastructure in what he called a “double-sided ceasefire,” while Iran agreed to reopen the Strait of Hormuz for two weeks, requiring transit to be coordinated with Iran’s Armed Forces. Global equities had sold off heavily since the conflict began as surging energy prices raised inflationary risks and bolstered bets on interest rate hikes. In Europe, investors will assess German factory orders, French trade figures, and Eurozone PPI and retail sales data. There are no major earnings releases. In premarket trade, Euro Stoxx 50 and Stoxx 600 futures were up more than 5% and 4%, respectively.