European Stocks Hit Record Highs Following US-Iran Deal
European stock markets rose sharply on Monday, hitting all-time highs. The STOXX 50 index rose to 6,260 points, while the STOXX 600 climbed to 640 points. This strengthening occurred after investor sentiment improved following a preliminary agreement between the United States and Iran to end the three-month conflict.
The agreement includes the lifting of the US blockade and the reopening of the Strait of Hormuz. This waterway is a vital route for global energy shipments, so news of its reopening helped ease market concerns about disruptions to oil and gas supplies. This has encouraged investors to return to riskier assets, including European stocks.
However, the market is still awaiting further confirmation as the agreement is not yet fully finalized. A memorandum of understanding is scheduled to be signed in Switzerland on Friday. However, several details remain unclear, particularly regarding the status of Iran's nuclear program, which remains a key issue in the negotiations.
The immediate impact of this agreement was seen in the sharp decline in oil prices. The decline in oil prices has helped ease energy inflationary pressures, thus easing expectations for central bank interest rate hikes. Financial markets now only expect one rate hike each from the European Central Bank and the Bank of England by the end of the year. (asd)
Source: Newsmaker.id
