European Stocks Head for Higher Open

European stocks traded higher on Thursday, with the STOXX 50 gaining 1% and the STOXX 600 advancing 0.5%, rebounding after three consecutive sessions of losses. The recovery was supported by easing oil prices, following a nearly 7% surge in crude over the previous two sessions. Despite the decline in oil, the situation in the Middle East remains highly fragile, as hopes for de-escalation faded following fresh strikes by both the US and Iran. Shipping traffic through the Strait of Hormuz continued, although volumes remained below normal. The tech sector was among the strongest performers, with semiconductor stocks benefiting from upbeat global sentiment after demand for SK Hynix's US share offering exceeded the available shares by more than seven times. ASML Holding rose 2.6%, Infineon Technologies gained 3.1%, and STMicroelectronics climbed 3.7%. Meanwhile, AstraZeneca plunged more than 9% after its Wainua drug failed to meet its primary goal of reducing cardiovascular deaths.

European equity markets were poised to open higher on Thursday after falling for three consecutive sessions, as investors continued to assess escalating tensions in the Middle East. The US military confirmed it had carried out strikes on Iran for a second straight day in an effort to curb Tehran’s ability to threaten navigation through the Strait of Hormuz, while Iran threatened a large-scale retaliatory operation against US military bases across the region. In Europe, data showed Germany’s trade surplus widened to €19.1 billion in May from €14.5 billion in April, as exports increased while imports declined. Meanwhile, there are no major corporate earnings releases scheduled across Europe today. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures advanced 1.1% and 0.8%, respectively.

European stocks closed sharply lower on Wednesday, tracking a global equity downturn after Iran and the US exchanged new strikes and raised inflationary risks for the Eurozone. The Euro STOXX 50 fell 2.0% to 6,190 and the STOXX Europe 600 fell 1.8% to 634. The US moved to block Iran oil sales after the war was reignited and President Trump invalidated the current ceasefire. The resulting surge in fuel prices raised sovereign yields to reflect expectations that the ECB is likely to deliver more rate hikes this year. Santander and Deutsche Bank sank more than 5%. Also, UniCredit dropped 2.9% after it increased its stake Commerzbank, increasing the likelihood of a full takeover in the upcoming quarters. Meanwhile, the AI trade continued to be unwound as software companies came under new pressure, with SAP sliding 4%.