Ukrainian servicemen operate a Soviet-made T-72 tank in the Sumy region, near the border with Russia, on August 12, 2024, amid the Russian invasion of Ukraine.
Roman Pilipey | Afp | Getty Images
LONDON — European stocks fell on Thursday as investors continued to assess developments in the Middle East and Ukraine.
The pan-European Stoxx 600 closed the session down 0.5%, with most sectors in negative territory and major bourses London, Paris and Frankfurt all ending the day lower. The Italian FTSE MIB bucked the trend, finishing Thursday up 0.5%.
European markets followed their counterparts in Asia-Pacific lower as investors weighed up mixed signals from U.S.-Iranian negotiations to end the war in the Middle East.
U.S. Secretary of State Marco Rubio said that talks with Iran have made some progress and that “we’re going to give it every chance to succeed,” adding that the U.S. prefers “the negotiated diplomatic route.”
But President Donald Trump has said that he will not permit Iran to control the key Strait of Hormuz as part of a deal.
While a Reuters report said that Tehran had committed to restoring commercial traffic through Hormuz to pre-war levels within one month of an agreement with the U.S., citing Iranian state media, the White House said in a social media post that the report about a memorandum of understanding was “a complete fabrication.”
In the meantime, U.S. forces launched fresh strikes in Iran, according to MS Now on Wednesday. These actions were “measured, purely defensive, and intended to maintain the ceasefire,” a U.S. official told MS NOW in a statement. Oil prices rose overnight following the developments.
European defense stocks rallied on Thursday after Ukraine’s parliament ratified a 90 billion-euro ($104.6 billion) loan agreement with the EU.
Ukrainian President Volodymyr Zelenskyy is currently in Sweden. Citing an anonymous source, Reuters reported on Thursday that Zelenskyy and Swedish Prime Minister Ulf Kristersson will jointly announce an agreement to provide Ukraine with Gripen fighter jets.
The pair signed a letter of intent last October that could see Sweden sell as many as 150 Saab Gripen fighter jets to Ukraine.
Saab topped the Stoxx 600, with the Swedish fighter jet maker closing the day 7.4% higher.
German tank parts maker Renk advanced 5.4%, while France’s Exail Technologies and Germany’s Rheinmetall popped 13.2% and 4.2%, respectively.
Elsewhere, shares of Spain’s eDreams jumped 11.3% in after the online travel agent posted a 52.2 million euro profit ($60.6 million) for its fiscal fourth quarter. While the result was up from 45.1 million euros for the same period a year earlier, it fell short of analyst estimates. The group reiterated its full-year forecast and noted that membership of its subscription program was up 9% year-on-year to 7.9 million customers.
Polish energy giant Orlen reported a 22.8% jump in first-quarter adjusted core profit, with earnings before interest, taxes, depreciation and amortization (EBITDA) beating analyst expectations. Shares rose more than 1%.
In the U.S., the S&P 500 was last seen up 0.5%, with the Dow Jones Industrial Average little changed and the Nasdaq 0.7% higher. The personal consumption expenditures price index, the Federal Reserve’s preferred gauge of inflation, increased by a seasonally adjusted 0.4% for the month, putting the 12-month inflation rate at 3.8%. Core inflation hit an annual rate of 3.3% in April, in line with expectations.
— CNBC’s Lisa Kailai Han and Justina Lee contributed to this market report.