European stocks surge across sectors as US-Iran ceasefire boosts market sentiment: DAX, CAC, FTSE100

European equities opened strongly higher on Wednesday, with gains visible across most sectors, as investors reacted positively to news of a conditional ceasefire agreement between the United States and Iran that eased weeks of geopolitical tension in the Middle East.

German carmakers were among the top performers in early trading. Shares of Porsche SE (TG:PAH3), Mercedes-Benz Group (TG:MBG), Porsche AG (TG:P911), Volkswagen (TG:VOW3) and BMW (TG:BMW) all climbed between 4% and 7% by 08:02 GMT.

Luxury goods companies also posted strong gains, with Kering (EU:KER), LVMH (EU:MC) and Hermès (EU:RMS) advancing roughly 6% to 7%.

The improvement in market sentiment followed comments from U.S. President Donald Trump, who said he had agreed to pause planned attacks on Iran for two weeks. The suspension was tied to the immediate reopening of the Strait of Hormuz and comes amid indications of progress on a 10-point proposal from Tehran.

Earlier on Tuesday, Trump had threatened to wipe out the entirety of the country’s civilization if Tehran did not cede to his demands by 8 p.m. ET. Trump added that the U.S. “will be helping with the traffic buildup” in the strait.

Iranian Foreign Minister Abbas Araghchi said on behalf of the country’s Supreme National Security Council that Tehran’s armed forces will “cease their defensive operations.”

European banking stocks also rallied strongly. Commerzbank (TG:CBK) surged nearly 10%, while Deutsche Bank (TG:DBK) gained 7.3%. Spanish lenders including BBVA (TG:BBVA), CaixaBank (BIT:1CABK), Banco Sabadell (BIT:1SAB), Bankinter (TG:BAKA), Banco Santander (LSE:BNC) and Unicaja Banco (TG:7UB) rose between 3.5% and 8%.

French banking groups BNP Paribas (EU:BNP), Société Générale (EU:GLE) and Crédit Agricole (EU:ACA) climbed between 5% and 10%, while Italy’s FTSE Italia All-Share Banks index gained 6.5%.

European semiconductor companies also posted strong advances. BE Semiconductor Industries (EU:BESI), ams-OSRAM, ASML (EU:ASML), Soitec (EU:SOI) and STMicroelectronics (BIT:STMMI) jumped between 5% and 11%.

Energy companies moved in the opposite direction as oil prices dropped below the $100 level following the ceasefire announcement. Brent crude futures fell nearly 14% to $94.30 at the time of writing, while WTI futures declined more than 15% to $95.77.