European stock markets moved sharply higher on Wednesday as investor sentiment improved on growing expectations that the United States and Iran could move toward a diplomatic agreement.
A steep drop in oil prices and easing concerns over energy-driven inflation further supported risk appetite across the region. Investor confidence was also boosted by record highs in U.S. stock futures and another round of strong corporate earnings reports.
The U.K.’s FTSE 100 climbed 2.6% from Tuesday’s close of 10,219.11 and was trading at 10,482.96. During the session, the index moved between 10,324.72 and 10,487.66.
France’s CAC 40 advanced 3.3% to 8,329.49 after fluctuating between 8,131.53 and 8,330.44. The benchmark index has now gained 8.2% since the start of the year.
Germany’s DAX jumped 2.7% to 25,041.89 from the previous close of 24,392.27. The index traded between 24,616.25 and 25,150.39 and touched its highest level in nine weeks.
Switzerland’s Swiss Market Index also rallied strongly, rising 2.3% from 13,052.17 to 13,348.40. The session range stood between 13,174.20 and 13,377.70.
The pan-European EURO STOXX 50 gained 3% to trade at 6,045.45, compared with its prior close of 5,869.63. Intraday trading ranged from 5,917.95 to 6,065.06.
Renewed optimism surrounding a possible U.S.-Iran peace agreement also weakened the safe-haven U.S. dollar.
The EUR/USD pair rose 0.7% to 1.1769, while GBP/USD gained 0.5% to trade at 1.3621.
European markets had already finished Tuesday’s session in positive territory after tensions in the Middle East showed signs of easing.
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