European Stocks Soar, Iran Deal a Hope
European stock markets closed higher on Friday (June 12th) after investors responded positively to signals that the United States and Iran could reach a deal to de-escalate their nearly three-month-long war. The Stoxx Europe 600 rose 1.9%, the German DAX and French CAC 40 each gained 1.8%, the FTSE 100 gained 1.6%, and the Swiss Market Index added 1.3%.
Risk sentiment improved after US President Donald Trump stated that Washington and Tehran might reach a deal by the weekend. These hopes for a de-escalation helped ease concerns about global energy disruptions, which had previously weighed on markets through oil prices, inflation, and interest rate expectations.
Data-wise, German inflation fell to 2.6% year-on-year in May from 2.9% in April. However, Destatis emphasized that energy prices remain high due to the Iran war. In the UK, the economy weakened after April GDP fell 0.1% month-on-month, the first contraction since August, with the services sector down 0.2%, manufacturing stagnant, and construction rising slightly by 0.1%.
In the corporate sector, Barclays rose 5% in London after agreeing to acquire GoHenry's UK operations from Acorns Grow. GSK gained 1% after its momelotinib therapy received orphan drug designation from the FDA and EMA for the treatment of VEXAS syndrome. Conversely, Shell fell 2% after reports of plans to sell offshore wind assets and the temporary suspension of its US$3 billion buyback program until July 14.
Overall, the rise in European stocks was driven largely by improved risk appetite due to hopes for a US-Iran peace deal. However, the market still has to weigh mixed economic data, persistently high energy prices, and the direction of central bank policy. If an Iran deal is reached, energy inflation pressures could ease and provide more room for European equities to continue their recovery. (arl)
Source: Newsmaker.id
