European Stocks Head for Higher Open

European equity markets were poised for a stronger open on Monday as growing optimism that the US and Iran were nearing a deal to reopen the Strait of Hormuz boosted investor sentiment. Oil prices fell sharply on the developments, easing concerns about inflation and further interest rate hikes, while supporting expectations that equities could resume their climb toward fresh record highs. There are no major economic data releases or corporate earnings reports scheduled in Europe on Monday, though investors are expected to closely monitor inflation readings from across the region later this week for further clues on the monetary policy outlook. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both higher by around 1%.

European equities closed firmly higher on Friday with support from the strong momentum for North American equities and a pullback in bond yields, improving the macroeconomic backdrop for the corporate sector. The Eurozone's STOXX 50 gained 3% to 6,025 and the pan-European STOXX 60 advanced 1.9% to 626, both testing their highest level since before the start of the war in Iran at the last session of February. AI infrastructure companies rallied as markets continued to gauge how much room there is for the sector to extend its strong momentum. Nokia surged 10.6% after announcing projects with AMD, Lenovo, and Supermicro. In turn, ASML jumped nearly 5%. Banks and industrial companies were also sharply higher, with Schneider, Airbus, Santander, and UniCredit adding over 2% each.

European stocks moved higher on Friday, with the STOXX 50 gaining 0.7% and the STOXX 600 advancing 0.6%, supported by strong momentum in the tech sector as investors continued rotating into AI-related companies following a positive lead from Asian markets. ASML Holding rose more than 2.5%, while Infineon climbed 4.3% and STMicroelectronics surged 3.9%. Luxury stocks also traded firmly higher after strong earnings from Richemont, whose full-year sales exceeded expectations, sending its shares up 2.3%. LVMH gained 1.4%, Hermes added 0.7%, and L’Oréal rose 0.4%. Despite the upbeat session, investors remained cautious as the conflict involving Iran continued to weigh on sentiment and add uncertainty to global markets. For the week so far, both the STOXX 50 and the STOXX 600 have gained around 2.3%, supported by growing optimism that the US and Iran could eventually reach an agreement to de-escalate tensions, potentially leading to the reopening of the Strait of Hormuz.