Ukrainian servicemen operate a Soviet-made T-72 tank in the Sumy region, near the border with Russia, on August 12, 2024, amid the Russian invasion of Ukraine.
Roman Pilipey | Afp | Getty Images
LONDON — European stocks fell on Thursday as investors assess the prospects of a peace deal to end the Iran war.
The pan-European Stoxx 600 was last seen trading 0.5% lower, with most sectors and major bourses in negative territory.
European bourses followed their counterparts in Asia-Pacific lower as investors weigh up mixed signals from U.S.-Iranian negotiations to end the war in the Middle East.
U.S. Secretary of State Marco Rubio said that talks with Iran have made some progress and that “we’re going to give it every chance to succeed,” adding that the U.S. prefers “the negotiated diplomatic route.”
But President Donald Trump has said that he will not permit Iran to control the key Strait of Hormuz as part of a deal.
While a Reuters report said that Tehran had committed to restoring commercial traffic through Hormuz to pre-war levels within one month of an agreement with the U.S., citing Iranian state media, the White House said in a social media post that the report about a memorandum of understanding was “a complete fabrication.”
In the meantime, U.S. forces launched fresh strikes in Iran, according to MS Now on Wednesday. These actions were “measured, purely defensive, and intended to maintain the ceasefire,” a U.S. official told MS NOW in a statement. Oil prices rose overnight following the developments.
European defense stocks rallied on Thursday after Ukraine’s parliament ratified a 90-billion-euro ($104.6 billion) loan agreement with the EU.
Ukrainian President Volodymyr Zelenskyy is currently in Sweden. Citing an anonymous source, Reuters reported on Thursday that Zelenskyy and Swedish Prime Minister Ulf Kristersson will jointly announce an agreement to provide Ukraine with Gripen fighter jets.
The pair signed a letter of intent last October that could see Sweden sell as many as 150 Saab Gripen fighter jets to Ukraine.
The pan-European Stoxx Aerospace and Defense index jumped 1.7% on Thursday morning, with Saab shares adding 5.2%.
German tank parts maker Renk surged 8.3%, while France’s Exail Technologies and Germany’s Rheinmetall popped 6.6% and 4.5%, respectively.
Elsewhere, shares of Spain’s eDreams jumped 10% in early trade after the online travel agent posted a 52.2 million euro profit ($60.6 million) for its fiscal fourth quarter. While the result was up from 45.1 million euros for the same period a year earlier, it fell short of analyst estimates. The group reiterated its full-year forecast and noted that membership of its subscription program was up 9% year-on-year to 7.9 million customers.
Polish energy giant Orlen reported a 22.8% jump in first-quarter adjusted core profit, with earnings before interest, taxes, depreciation and amortization (EBITDA) beating analyst expectations. Shares were last seen trading 1.2% higher.
In the U.S., S&P 500 futures were little changed overnight as traders looked ahead to the release of April’s personal consumption expenditure price index reading, due out at 8:30 a.m. ET.
The index is the Federal Reserve’s preferred gauge of inflation and economists polled by Dow Jones expect a month-over-month increase of 0.5% and a year-over-year rise of 3.8%.
— CNBC’s Lisa Kailai Han and Justina Lee contributed to this market report.
