European shares rise as oil eases
The pan-European STOXX 600 closed 0.5% higher at 624.45 points
European shares rose on Thursday as oil prices eased, although investors remained cautious on whether the latest developments in the Middle East would lead to a durable peace deal.
Brent crude futures dropped 2.8% to $95.06 a barrel.
Investors were looking for firmer evidence that a breakthrough was possible after several failed rounds of talks.
The pan-European STOXX 600 closed 0.5% higher at 624.45 points, led by gains in healthcare with French biotech Abivax climbing 17.8% and rebounding from losses earlier in the week.
The STOXX 600 remained on track for a marginal weekly decline, with the Strait of Hormuz, a key international oil-shipping route, still mostly shut.
Persistent price pressures have led markets to price in a 25-basis-point rate hike by the European Central Bank at next week’s meeting, according to LSEG data.
The well telegraphed policy hike coming next week reveals a preference for curbing upside inflationary risks rather than addressing downside growth risks, said a group of macro analysts led by Rune Thyge Johansen at Danske Bank.
We expect Christine Lagarde to keep full optionality on the future policy rate path, including a potential second summer hike, Danske Bank’s analysts added.
Chip stocks eased, with Infineon Technologies and STMicroelectronics down 3.4% and 2.6%, respectively.
Europe’s lack of heavy exposure to technology has hurt it in the past, but today it is helping, because investors are rotating away from tech and toward defensive, value-oriented parts of the market, said Steve Sosnick, chief market analyst at Interactive Brokers.
Software and IT stocks extended a recovery from a sharp selloff over AI disruption concerns. Capgemini, Nemetschek, Dassault Systemes, SAP and Sopra Steria gained between 6.39% and 8.79%.
Shares of British financial firms with exposure to China dropped after Chinese media reported mainland residents were facing tighter restrictions on opening offshore accounts at major Hong Kong banks. HSBC, Standard Chartered and Prudential declined between 1.8% and 7.6%.