European stock markets climbed on Tuesday, buoyed by news of a ceasefire agreement between Israel and Iran, which was verified by both Israeli Prime Minister Benjamin Netanyahu’s office and Iranian state media outlet Press TV.
Investors also reacted positively to stronger-than-expected business sentiment data out of Germany. According to a new survey from the Ifo Institute, German business confidence rose in June, signaling improved expectations among companies. The institute’s closely watched business climate index increased to 88.4, up from 87.5 in May, suggesting optimism is gaining ground in Europe’s largest economy.
Attention across the continent is now shifting to Federal Reserve Chair Jerome Powell, who is set to testify before U.S. lawmakers later today. Markets are keenly watching for clues on interest rate policy and the Fed’s outlook amid global economic uncertainty.
By midday trading, the DAX in Germany had jumped 1.9%, the CAC 40 in France gained 1.2%, and London’s FTSE 100 rose a more modest 0.4%.
Travel and leisure stocks were among the top performers, with Carnival and EasyJet rallying between 6% and 7% as investors turned back to risk-on sentiment.
In contrast, defense sector shares retreated on the news of easing geopolitical tensions. Hensoldt dropped 2.8%, and Rheinmetall declined 1.4%.
Among individual movers, Volvo AB climbed 2.6% after its construction equipment division announced plans to divest its stake in Chinese company Shandong Lingong Construction Machinery Co. (SDLG). The buyer is a fund largely controlled by Volvo’s local partner, the Lingong Group (LGG).
Meanwhile, RM Plc, a provider of educational tech and resources, surged 9% after reaffirming that it remains on course to meet full-year financial goals.
Packaging and distribution company Bunzl rose 1.5% after unveiling a new acquisition – a deal to purchase Solupack, a Brazilian firm specializing in food packaging solutions.
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