European equity markets moved higher in volatile trading on Thursday, supported by a strong rebound in technology shares as investors assessed the latest developments in the Middle East after U.S. President Donald Trump said Iran wanted to “make a deal”.
The pan-European STOXX 600 index gained 0.5% to 639.12 points by 08:16 GMT. Technology and basic resources led sector performance, advancing 1.8% and 2.8% respectively.
Semiconductor-related stocks drove much of the rally, with Siltronic (TG:WAF) surging 10.5%, Soitec (EU:SOI) rising 4.5% and ASML (EU:ASML) adding 2.6%.
The technology sector had paused after recording its strongest quarterly performance since 2001 in June, and Thursday’s recovery suggested investors were temporarily looking beyond concerns over stretched valuations. Even so, the sector remains the weakest performer on the STOXX 600 so far this month.
Market sentiment also received support from reports that China could permit domestic artificial intelligence companies to access Nvidia’s (NASDAQ:NVDA) H200 chips on a limited basis, raising expectations of continued investment in AI infrastructure.
Oil prices edged lower as investors continued to monitor geopolitical developments. Energy markets remained focused on the conflict between the United States and Iran after fresh U.S. strikes followed President Trump’s statement on Wednesday that negotiations with Tehran were over, contributing to the STOXX 600’s largest one-day decline since March.
“Positive developments around the AI trade are supporting sentiment, but it’s not simply a case of AI outweighing concerns over U.S.-Iran tensions. Investors have also become a little more immune to developments in that story, viewing them as part of what has always been a choppy path towards a broader agreement,” said Fiona Cincotta, senior market analyst at City Index.
Spanish equities outperformed the wider European market, climbing 1.1% after recovering from a three-week low reached on Wednesday. The rebound followed President Trump’s comments describing Spain as “very generous” after his decision to halt trade with the country over its NATO contribution.
Company Movers
Healthcare was the weakest-performing sector, falling 1.5%, largely due to a 9.1% decline in AstraZeneca (LSE:AZN). The pharmaceutical company came under pressure after its experimental drug Wainua, developed with U.S.-based Ionis, failed to meet the primary objective of reducing cardiovascular deaths and recurrent heart complications in a late-stage clinical trial.
Elsewhere, IT services company Computacenter (LSE:CCC) surged 11.1% after forecasting full-year results comfortably ahead of market expectations, supported by continued strong demand for AI-related infrastructure.
Wind turbine manufacturer Nordex (TG:NDX1) gained 5% after reporting that second-quarter project orders increased year-on-year to 3,054 MW, driven by significant contract wins in the United States.
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