European shares surged on Friday afternoon after Iran declared the Strait of Hormuz completely open to commercial traffic.
The pan-European Stoxx 600 closed up 1.6%, with all major bourses and most sectors finishing the session in positive territory.
The travel and leisure sector led the advance, ending the day about 4.7% higher.
Individual airline stocks soared, with easyJet shares closing almost 6.1% higher and Wizz Air surging 7.6%. London-listed shares of International Consolidated Airlines Group, which owns British Airways, Vueling and Aer Lingus among others, gained 6.2%. TUI, the Frankfurt-listed European travel and tourism mainstay, was up more than 5.4% by the closing bell.
German airline Lufthansa, which warned Thursday that it would immediately ground dozens of planes and cut flight capacity amid rising fuel prices, ended 5.6% higher, erasing morning losses.
Oil and gas stocks were the notable exception, ending 4.2% lower after news of the breakthrough sent oil prices into reverse. In London, BP shares slumped 7.4%, while Shell closed 5.6% lower. Norwegian energy major Vår Energi finished the day 6.2% lower.
Prices of Brent crude, the global oil benchmark, fell 10.6% to reach $88.85 a barrel, while in the U.S., West Texas Intermediate slipped 12% to $82.88 per barrel.
Friday’s dramatic reversal came after U.S. President Donald Trump’s hinted that an end to the war is in sight. On Thursday, a 10-day ceasefire between Israel and Lebanon took effect, also helping to boost investor sentiment in global equity markets.
Overnight, Trump said at an event in Las Vegas that the war “should be ending pretty soon,” and that operations in Iran are “going along swimmingly.” On April 1, the president said he expected the war to last another two to three weeks.
Earlier, Asia-Pacific equity markets generally moved lower on Friday. On Wall Street, U.S. equities gained following the Strait of Hormuz reopening, with the S&P 500 up 1.4% and the Dow Jones Industrial Average adding about 2.2%.
Swedish telecoms giant Ericsson reported an earnings miss on Friday. Adjusted operating profit for the first quarter came in at 5.2 billion Swedish kronor ($570 million), slightly below the 5.4 billion kronor expected by analysts, according to Reuters.
Shares of Ericsson closed 3.7% lower.
Meanwhile, shares in French train maker Alstom nosedived 27% after the company withdrew its financial guidance the night before and told investors it would miss profit targets.
“While there was already investor concern following the pre-close message earlier this month that new CEO Martin Sion may withdraw guidance, the preliminary outlook is worse,” Citi wrote in an investor note.
— CNBC’s Dan Mangan contributed to this article.
