Category: Top Story

European equity markets posted modest gains on Thursday, supported by optimism that upcoming discussions between Iran and the United States could help ease tensions in the Middle East.

Reports suggest both sides are considering extending the current ceasefire by an additional two weeks to allow more time for negotiations.

Investors also reacted to a fresh wave of corporate earnings releases and newly published economic data across the region.

France’s CAC 40 rose 0.6%, while both the UK’s FTSE 100 and Germany’s DAX advanced by 0.7%.

In Frankfurt, Zalando climbed 3.2%, while SAP added around 2.3% and Brenntag gained nearly 2%. Beiersdorf, MTU Aero Engines and Heidelberg Materials also moved higher, rising between 1% and 1.3%.

On the downside, Qiagen, Merck, Deutsche Telekom, Mercedes-Benz, Daimler Truck Holding, BMW and Volkswagen declined between 0.5% and 1.6%.

In Paris, Dassault Systèmes gained 2.2%. Capgemini, Teleperformance, Saint-Gobain, Airbus, Publicis Groupe and Michelin rose between 1.2% and 2%.

Kering slipped 1.7%, while L’Oréal, ArcelorMittal, TotalEnergies and Engie also traded lower.

In London, Entain surged 7.5% after reaffirming its revenue outlook. Halma, B&M European Value Retail, Vistry Group, Frasers Group, JD Sports Fashion, Pershing Square Holdings, Rightmove and Persimmon posted gains of between 2% and 3.5%.

Tesco also jumped following strong sales and profit growth, alongside the announcement of a £500 million share buyback.

EasyJet fell about 5% amid ongoing uncertainty linked to the Middle East situation. Airtel Africa, Convatec Group, Unite Group, Vodafone and Antofagasta declined between 1.6% and 2%.

On the economic front, figures from the Office for National Statistics showed UK GDP expanded by 0.5% in February, exceeding the 0.1% growth recorded in January.

Economists had expected growth to remain at 0.1%. On an annual basis, the economy grew by 1% in February.

From a sector perspective, services—the largest part of the economy—rose 0.5%, while construction output increased by 1%.

Industrial production grew 0.5%, following declines of 0.1% in January and 0.4% in December. Manufacturing output, however, slipped 0.1%, reversing January’s 0.2% increase.

Year on year, industrial production fell 0.4%, while manufacturing output declined 0.5% in February.

Meanwhile, final data from Eurostat showed eurozone inflation rose more than initially estimated in March, reaching its highest level since mid-2024.

The harmonised consumer price index increased 2.6% year on year, revised up from an initial estimate of 2.5%, and compared with 1.9% growth in February.

European equities opened slightly higher on Thursday, following gains in global markets as investors remained optimistic about a potential resolution to the Iran conflict.

By 07:05 GMT, the pan-European Stoxx 600 was up 0.2%, while France’s CAC 40 rose 0.1% and the UK’s FTSE 100 gained 0.2%. Germany’s DAX, however, slipped marginally by 0.1%.

The Stoxx 600 is gradually recovering losses recorded since the escalation of the Iran conflict in late February. Even so, European markets have lagged behind Wall Street, with traders pointing to the region’s reliance on natural gas imports from Middle Eastern facilities affected by missile strikes. In contrast, the United States, as a net energy exporter, may be better shielded from the economic impact of the conflict.

Diplomatic efforts to secure a lasting ceasefire between the United States and Iran are ongoing, with a temporary two-week truce set to expire later this month.

According to the Wall Street Journal, Washington and Tehran have agreed in principle to resume negotiations after initial talks held last weekend in Pakistan failed to produce an immediate agreement. Officials familiar with the discussions indicated that no date or location has yet been confirmed.

The newspaper also reported that Vice President JD Vance is expected to lead the US delegation in any upcoming talks with Iran.

U.S. President Donald Trump has said that discussions between Israel and Lebanon are scheduled to take place later today. The Financial Times, citing Lebanese officials, reported that a ceasefire between the two sides, which have posed a risk to the broader US-Iran truce, could be reached “soon.”

Despite these developments, tensions persist, particularly over the ongoing US naval blockade of Iranian ports. A senior Iranian military official has warned Washington against continuing the blockade, while US Central Command maintains that no Iranian-linked vessels have managed to bypass it.

Oil prices edged higher, remaining below $100 per barrel but still significantly above pre-conflict levels, as markets assess the potential impact of a prolonged disruption in the Strait of Hormuz. The key shipping route off Iran’s southern coast has been largely inaccessible to tanker traffic for several weeks, tightening global energy supply and supporting crude prices.

Meanwhile, Europe’s earnings season is gathering pace, offering insight into how companies are navigating the challenges posed by the Iran conflict.

UK equities opened slightly higher on Thursday after stronger-than-expected GDP data for February, while investors continued to monitor developments סביב potential US-Iran ceasefire talks. Broader European markets were mixed, and the pound held steady against the dollar.

As of 07:05 GMT, the FTSE 100 rose 0.2%, while GBP/USD gained 0.07% to 1.3577. Germany’s DAX slipped 0.04%, and France’s CAC 40 added 0.1%.

UK Round-Up

Fresh data from the Office for National Statistics showed the UK economy expanded in February, beating analyst expectations. Growth came in above the 0.1% forecast by economists, following an upwardly revised 0.1% increase in January. The expansion was supported by broad-based gains, with services output rising 0.5% month on month, industrial production also up 0.5%, and construction output jumping 1.0% despite wet weather conditions.

Tesco PLC (LSE:TSCO) said ongoing uncertainty linked to the Middle East conflict has led it to widen its profit guidance for the 2026/27 financial year. The company expects adjusted operating profit to range between £3.0 billion and £3.3 billion, compared with £3.152 billion reported for 2025/26, slightly ahead of its prior targets.

Ashmore Group Plc (LSE:ASHM) reported a $1.8 billion reduction in assets under management during its fiscal third quarter, with total AUM falling to $50.7 billion as of March 31. The decline reflected an even split between net outflows and weaker investment performance, amid heightened geopolitical volatility.

Rentokil Initial PLC (LSE:RTO) delivered first-quarter organic growth of 3.4%, exceeding analyst expectations of 3.0%. Total revenue reached $1,677 million, up 4.3% year on year, supported by steady growth across pest control and hygiene services, particularly in North America.

Hays Plc (LSE:HAS) reported an 8% year-on-year decline in third-quarter like-for-like net fees, an improvement on the 10% drop recorded in the previous quarter. Performance was broadly in line with March trading trends, with the Rest of World segment contributing to the slight outperformance versus forecasts.

Schroders PLC (LSE:SDR) recorded £1.1 billion in client outflows during the first quarter of 2026, as geopolitical tensions weighed on investor sentiment. Assets under management stood at £814.4 billion at the end of the period, down from £823.7 billion at the close of 2025.

European equities showed little clear direction on Wednesday, as investors assessed a mixed batch of corporate earnings while also preparing for a potential new round of face-to-face negotiations between the United States and Iran, which could begin as early as this weekend.

Reports suggest Washington has outlined two fresh conditions ahead of any renewed dialogue. According to Israel Hayom, the U.S. is seeking a full and unrestricted reopening of the Strait of Hormuz and continues to emphasize a reciprocal approach in negotiations.

On the macroeconomic front, updated data from France’s statistics agency INSEE showed that harmonized consumer price inflation for March came in slightly higher than initially estimated.

EU-harmonized inflation reached 2.0% for the month, above the preliminary reading of 1.9% and up from 1.1% in February.

Domestic consumer price inflation in France was confirmed at 1.7%, rising from 0.9% the previous month and marking the fastest pace of increase since August 2024.

Meanwhile, Eurostat reported that industrial production across the eurozone rose 0.4% in February compared with January.

In equity markets, France’s CAC 40 was down 0.6%, while the UK’s FTSE 100 hovered around flat levels and Germany’s DAX edged up 0.1%.

Hermes International (EU:RMS) dropped 10% after reporting slower first-quarter sales growth.

Stellantis (BIT:STLAM) climbed 3.4% after announcing a 12% increase in global vehicle shipments for the first quarter.

ASML (EU:ASML) gained 1.7% after lifting its 2026 sales outlook, supported by first-quarter results that exceeded expectations.

Aegon (EU:AGN) declined nearly 2% following an agreement to sell its UK operations to Standard Life in a deal valued at £2 billion.

Rank Group (LSE:RNK) surged 11% in London after raising its full-year underlying operating profit guidance, supported by a 5% year-on-year increase in fiscal third-quarter net gaming revenue.

Antofagasta (LSE:ANTO) rose 3.2%. Despite reporting a decline in first-quarter copper output, the company said it expects production to increase progressively over the rest of the year.

European equities traded in a narrow range on Wednesday, as investors weighed fresh signals from Washington suggesting a renewed push toward ending the conflict with Iran.

By 07:09 GMT, the pan-European STOXX 600 was marginally higher by 0.1%, while Germany’s DAX and the UK’s FTSE 100 each gained around 0.2%.

France’s CAC 40 underperformed, falling 0.6%, dragged lower in part by a sharp decline in Hermès (EU:RMS), which reported slower quarterly sales growth amid weaker demand linked to the Iran conflict.

Market sentiment found some support from ASML (EU:ASML), Europe’s most valuable listed firm. The company raised its full-year sales outlook, benefiting from strong demand tied to the artificial intelligence boom. Major chipmakers, including TSMC and Intel, continue to invest heavily in ASML’s technology to expand their AI capabilities.

On the geopolitical front, U.S. President Donald Trump indicated that talks with Iran could resume within the next two days, following initial negotiations held in Pakistan over the weekend. Vice President JD Vance, who led the U.S. delegation in Islamabad, also struck an optimistic tone regarding progress.

Despite this, the U.S. has maintained a blockade on Iranian ports. Officials said maritime trade to and from the country has effectively been halted after the latest round of talks failed to deliver an immediate ceasefire agreement, although expectations for a quick resolution had already been low.

The restrictions have raised concerns about oil supply disruptions through the Persian Gulf, where flows have already slowed significantly. However, reports suggest that more than 20 commercial vessels have recently passed through the Strait of Hormuz, hinting at some easing in transit conditions.

Oil prices remained below the $100 mark but stayed elevated compared with pre-conflict levels. Brent crude rose 0.3% to $95.10 a barrel, while U.S. West Texas Intermediate slipped 0.2% to $91.12.