European equities extended their recent rally on Thursday, reaching another record level as investors weighed the possibility of a U.S.-Iran agreement and monitored progress towards reopening the Strait of Hormuz. Market attention also remained firmly focused on the latest round of corporate earnings.
By 07:18 GMT, the pan-European STOXX 600 index had advanced 0.4% to 660, building on record closing highs achieved during the previous two trading sessions.
According to Reuters, a senior Iranian official and two regional sources said a proposed agreement involving Iran and Oman aimed at ending five months of conflict would give Tehran authority over vessels entering the Gulf through the Strait of Hormuz. The proposal represents one of the most significant concessions made to Iran so far during negotiations.
Company earnings continued to drive market sentiment. Analysts have steadily revised profit forecasts higher throughout the reporting season, with second-quarter STOXX 600 earnings now expected to increase by almost 21%, according to data compiled by LSEG. That compares with growth expectations of roughly 12.5% at the beginning of May.
Deutsche Telekom (TG:DTE) climbed 5.5% after the German telecommunications group expanded its 2026 share buyback programme by €3 billion to a total of up to €5 billion. The broader European telecommunications sector gained 1.6%.
The food and beverages sector also performed strongly, rising 1%. Glanbia (LSE:GLB) jumped 8.4% after the Irish nutrition company reported a 7% year-on-year increase in first-half revenue.
Meanwhile, investors largely brushed aside a recent pullback in global technology shares following the artificial intelligence-driven rally, with the STOXX 600 technology index edging 0.1% higher.
Later in the day, market participants will monitor eurozone retail sales figures for further indications of consumer spending trends across the region.
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