European stocks rally as oil falls on hopes for US-Iran deal

EUROPEAN shares rallied at open on Friday (Jun 12), with all major indexes gaining more than 1 per cent, as oil prices slipped on hopes for a diplomatic breakthrough in the Middle East.

Brent crude fell more than 2 per cent, extending the previous session’s losses, after US President Donald Trump cancelled plans to strike Iran, reducing fears of an escalation of hostilities.

The pan-European Stoxx 600 index advanced 1.2 per cent to 628.81 points by 0720 GMT and was set for a 1 per cent weekly gain. All sectors except energy rose.

The benchmark snapped a four-day losing streak on Thursday, as investors digested the European Central Bank’s rate hike and largely looked past escalating rhetoric around the US-Iran conflict.

Travel and leisure stocks led sectoral gains with a 3.4 per cent rise, with Lufthansa and Air France jumping 4.6 per cent and 5.7 per cent, respectively.

Banks gained 2.3 per cent, with Barclays and Standard Chartered climbing more than 2 per cent.

AI equipment makers Legrand and Schneider Electric climbed 1 per cent and 1.4 per cent, respectively.

Novo Nordisk added 0.4 per cent after Britain’s medicine regulator approved the drugmaker’s weight-loss pill on Thursday, making the UK the first market in Europe where patients can access the oral treatment.

Among other movers, online gaming operator Entain rose 3.2 per cent after Barclays upgraded the European gaming sector to “market-weight”.

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On the data front, German inflation eased slightly to 2.7 per cent in May, while Britain’s economy contracted by 0.1 per cent in April. REUTERS