European shares end at more than one-month high on tech boost

[BENGALURU] European shares finished at their highest in over a month on Friday (May 22), led by technology stocks as risk sentiment got a lift on expectations that a deal to end the Middle East conflict could be near.

The pan-European STOXX 600 ended 0.73 per cent higher at 625.12 points and logged its biggest weekly gain in seven.

US Secretary of State Marco Rubio said that there was some progress towards an agreement with Teheran but more work is required, the latest development in the US-Iran impasse that has ensued since Washington suspended bombing in a fragile ceasefire in early April.

Key disagreements between Teheran and Washington involve Iran’s uranium stockpile and controls on the Strait of Hormuz. Reflecting the broader uncertainty, crude prices rose 1 per cent to US$103 a barrel.

Analysts expect a deal that includes opening the strategic waterway to lift European equities that have lagged peers, given the region’s dependence on oil imports that have become costly since the war.

“We are neutral on Europe and eurozone equities, given their sensitivity to higher energy costs, while we view the more defensive Swiss market and European healthcare more favourably,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

AI optimism that has driven global indexes to record highs also helped the European tech index rise almost 3.2 per cent. Chip giant Nvidia outlined strong forecasts earlier this week, suggesting strong demand for tech infrastructure.

Among European chip stocks, Infineon added nearly 8 per cent, STMicroelectronics gained 5.2 per cent and ASML rose 4.7 per cent.

Also aiding the sector was French President Emmanuel Macron’s comments that the government will invest an additional 1 billion euros (S$1.5 billion) in its quantum strategy and 550 million euros to support the microelectronics sector.

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European shares hit over two-week highs on signs of progress in US-Iran talks

Among laggards, Puig tumbled 13.4 per cent after the Spanish perfumery ended merger talks with US cosmetics maker Estée Lauder.

Julius Baer fell 6.9 per cent after the Swiss bank’s net new money inflows came in below expectations.

On the data front, German consumer sentiment recovered heading into June, while a separate reading confirmed that the economy grew by 0.3 per cent in the first quarter of 2026. Germany’s DAX led gains among regional indexes with a 1.1 per cent rise.

Still, other data reports have suggested price pressures are heating up. Europe’s economy commissioner Valdis Dombrovskis became the latest official to say the European Central Bank would need to react to rising inflation.

Money markets price in at least two ECB interest rate hikes before the end of the year.

Among other companies, Cartier owner Richemont reported better-than-expected fourth-quarter revenue. Shares were volatile and ended marginally lower. REUTERS