Europe’s Stoxx 600 hits record high after US-Iran preliminary peace deal

EUROPE’S Stoxx 600 opened at a record high on Monday (Jun 15), with most sectors gaining after the United States and Iran reached a preliminary peace agreement that would open the Strait of Hormuz and end the three-month-long conflict in the Middle East.

Global risk sentiment got a lift and Brent crude prices fell 4 per cent after US and Iranian officials said they had agreed on a framework for a deal, scheduled to be signed on Friday.

The pan-European Stoxx 600 index rose 1.2 per cent to 640.94 points by 0711 GMT, surpassing its previous record high hit on Feb 27. With Monday’s gains, the benchmark index reclaimed all of its conflict-related losses.

A majority of sectors advanced, led by a 3.5 per cent gain in auto stocks, while energy price-sensitive airlines such as Lufthansa and Air France jumped more than 5 per cent each. The broader travel and leisure sector hit a record high.

European shares had broadly underperformed their peers in the US and Asia since March, largely due to the continent’s reliance on the Strait of Hormuz for crucial oil supplies.

Concerns over energy-driven inflation had the European Central Bank hike interest rates by 25 basis points last week.

Traders continue to anticipate another 25-bp ECB rate hike before the end of the year, according to LSEG-compiled data.

In corporate news, Renault Group gained 5 per cent after the carmaker said it will develop a military vehicle in partnership with defence technology company Thales.

AI equipment maker Schneider Electric climbed 3.3 per cent after entering a strategic collaboration with Taiwan’s Foxconn to develop and scale infrastructure for next-generation AI data centres.

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Among laggards, energy stocks fell 2.7 per cent, tracking lower crude prices. REUTERS