Major European indexes were in positive territory in early trading, buoyed by signs that the latest round of US-Iran negotiations could be nearing a breakthrough.
The prospect of a deal has been enough to steady nerves, even if traders remain wary of false dawns in a conflict that has rattled commodity and bond markets since it began in late February.
The DAX rose 0.64%, with Deutsche Post AG leading gains at 3.61%. The CAC 40 added 0.65%, lifted by STMicroelectronics, which surged 3.43%. London’s FTSE 100 gained 0.38%, with 3i Group up 2.31%, while the Euro Stoxx 50 climbed 0.88%.
The euro and pound sterling were broadly flat against the dollar, trading at $1.161 and $1.342 respectively at around 9 am CET.
Germany offered some additional cheer, with the eurozone’s largest economy posting expected first-quarter growth of 0.4% year on year, and consumer confidence for June showing improvement — a tentatively encouraging signal for an economy that has had few of them lately.
Asian markets extend the rally
Tokyo’s Nikkei 225 led regional gains with a 2.7% rise to 63,339, helped by data showing Japanese inflation fell to a four-year low of 1.4% in April — a notable cooling even as the war in Iran kept energy prices elevated.
The figures gave markets room to breathe at a time when inflation has been a source of acute global anxiety.
Taiwan’s Taiex closed 2.2% higher, while Hong Kong’s Hang Seng gained 0.9% to 25,612, and the Shanghai Composite rose by the same margin to 4,112. South Korea’s Kospi edged up 0.4% to 7,847, Australia’s S&P/ASX 200 added 0.4% to 8,657, and India’s Sensex rose 0.6%.
The moves followed a muted but positive session on Wall Street. The S&P 500 added 0.2% to 7,445, the Dow Jones Industrial Average rose 0.6% to 50,285, and the Nasdaq edged up 0.1% to 26,293.
Nvidia slipped 1.8% despite better-than-expected quarterly results, with some analysts still viewing the stock as undervalued — a sign that even strong numbers are being met with caution in the current climate.
Oil climbs as Hormuz disruption drags on
Oil prices remained under upward pressure. In the European opening, Brent crude was up by 2.3% at $104.97 a barrel — up sharply from around $70 before the conflict began in late February — while US benchmark crude rose 1.8% to $98.10.
At the heart of the pressure is the Strait of Hormuz, the narrow waterway between Iran and Oman through which around a quarter of the world’s seaborne oil trade passes.
Shipping activity there remains well below pre-war levels, and with US-Iran talks continuing without resolution, there is little sign of an early return to normal flows.
“Markets are still searching for signs of progress in a potential deal between the US and Iran,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note on Friday. “While there are signs of optimism, uncertainty reigns.”
In Washington, Republican congressional leaders declined to hold a scheduled Thursday vote on a Democratic war powers resolution that would compel President Donald Trump to withdraw from the conflict, after it became clear they lacked the numbers to defeat the bill. The vote has been pushed to June.
Elevated oil prices have fed directly into bond markets, where higher inflation expectations push yields up and asset prices down.
The yield on the US 10-year Treasury stood at 4.57% on Friday, easing from above 4.67% earlier in the week — when the surge had threatened to weigh on stocks, property and other rate-sensitive assets worldwide.
The euro was trading at $1.1605, down slightly on the day, while the US dollar rose to 159.12 Japanese yen from 158.98.
Lenovo surges 20% on bumper earnings
In corporate news, shares of Hong Kong-listed Lenovo Group skyrocketed more than 20% after the technology company’s fourth-quarter results far exceeded analyst expectations.
Revenue came in at $21.6bn (€18.7bn), a 27% rise year on year.
The biggest driver was Lenovo’s PC, tablet and smartphone division, which posted about a 20% jump in revenue, with its PC and smart devices unit recording its strongest quarterly growth in five years.
The stock was trading 20.3% higher at HK$15.82 (€1.87) by mid-morning in Europe.