Stocks in Euro Area Hit 5-week High

European stocks opened the week on a strong note, with the STOXX 50 climbing 1.1% and the STOXX 600 rising 0.6% to near three-month highs, as investors grew increasingly optimistic about a US-Iran agreement that could reopen the Strait of Hormuz. President Trump said negotiations with Iran were “proceeding in an orderly and constructive manner,” while adding that he was “in no rush” to secure a final deal. At the same time, senior US officials signaled that Washington and Tehran were edging closer to an agreement that would restore access to the key shipping route. The prospect of easing geopolitical risks pushed oil prices sharply lower. Banks led the gains, with BBVA rising 2.5%, Santander up 2%, UniCredit advancing 2%, and BNP Paribas adding 1.7%. Industrial stocks also performed strongly, including Safran (+5.1%) and Siemens (+1.9%), while airlines rallied on the back of lower fuel prices, namely Lufthansa (+4.1%) and Air France-KLM (+7.6%).

EU50 increased to 6072.00 Index Points, the highest since April 2026. Over the past 4 weeks, Euro Area Stock Market Index (EU50) gained 3.64%, and in the last 12 months, it increased 12.57%.

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%.