European shares rise as ‌oil decline

The pan-European STOXX 600 was up 0.7% at 611.10 points

European shares rose on Wednesday, recovering from a sharp drop in the previous session, as ‌oil prices declined after a shaky truce held between Tehran and Washington despite a deadlock in peace talks.

The pan-European STOXX 600 was up 0.7% at 611.10 points, as of 0832 GMT. The index closed more than 1% lower on Tuesday.

Regional bourses ​were higher, with London’s FTSE 100 and Germany’s DAX gaining 0.6% and 0.9%, respectively.

Ahead of a ​high-stakes summit in Beijing, U.S. President Donald Trump said he does not think he ⁠will need China’s help to end the U.S.-Israeli war with Iran.

Tehran’s firm control over the Strait of Hormuz has ​kept prices above $100 a barrel, stoking inflation and weighing on global growth. Europe, dependent on energy imports, has remained vulnerable, with equities continuing ​to trade below pre-war levels.

The big thing is the closure of the Strait of Hormuz. We saw relief when oil prices dropped back to $90 when there were expectations of a peace deal between Iran and the U.S. and the Strait reopening, said Joost van ​Leenders, senior investment strategist at Van Lanschot Kempen. And those hopes have been dashed.

With first-quarter earnings winding up, corporate ​profits in aggregate are expected to rise at their fastest pace in three years. European earnings are expected to have grown ‌10.2% for ⁠the quarter, according to LSEG-compiled data.

When you look at earnings growth for the whole year, I think it’s around 13%. That would be quite an improvement from the past years, so we’re a bit cautious on that to see if that will be realised, van Leenders added.