European stock markets staged a strong comeback on Monday after U.S. President Donald Trump hinted at a potential de-escalation in tensions with Iran, calming investor nerves following days of uncertainty. The shift in tone from Washington offered markets a much-needed breather, reversing earlier losses driven by fears of escalating conflict in the Middle East.
The pan-European Stoxx 600 index rose by 1.65% by mid-afternoon in London, recovering from a near 2% drop earlier in the day. Gains were broad-based, with most sectors and major regional indices turning positive as sentiment improved across trading floors.
Investor confidence was boosted after Trump announced a five-day delay on planned strikes targeting Iran’s energy infrastructure. He also described recent discussions between U.S. and Iranian officials as “very good and productive,” raising hopes for a possible resolution. Travel and leisure stocks led the rally, climbing 2.9%, while basic resources rebounded sharply after earlier losses.
Markets had initially been rattled by escalating rhetoric over the weekend, including threats from both Washington and Tehran tied to the strategic Strait of Hormuz. The uncertainty had triggered a sell-off in Asian markets earlier on Monday and heightened concerns over global energy supply disruptions.
Meanwhile, oil prices swung sharply amid the geopolitical developments, while gold prices pulled back after earlier gains. In corporate activity, Poste Italiane shares dropped following a major acquisition announcement, while Delivery Hero surged after agreeing to sell its Taiwan unit. U.S. markets also responded positively, with major indices opening higher as global risk sentiment improved.
source: cnbc