European Stocks Gain on Optimism Over Strait of Hormuz Reopening
(Bloomberg) — European stocks edged higher, building on Monday’s record close, as the prospect of the Strait of Hormuz reopening later this week boosted appetite for risk among investors.
The Stoxx Europe 600 Index was up 0.2% at the close. Banking and industrial stocks outperformed, while the telecom and technology sectors were the biggest laggards.
The benchmark advanced as the US and Iran prepared to formally sign their interim peace deal in Switzerland on Friday.
“We might experience a bit of ‘buy the rumor and sell the fact’ behavior, especially as the situation still seems somewhat fragile and there is a remaining risk that things tear apart in the final innings,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management.
Oil headed for its longest losing streak this year as the US-Iran deal to reopen the Strait of Hormuz boosted expectations for a revival in supply.
The European benchmark closed on Monday at its first record high since the start of the Iran war. Yet, it still lags behind other regions due to its limited exposure to tech stocks that have profited from investor excitement over the artificial-intelligence trade.
“We think AI stocks are in a bubble, but we need that bubble to pop before Europe can outperform again,” said Joachim Klement, head of strategy at Panmure Liberum.
In individual stocks, Siegfried Holding AG fell 7.6% after UBS downgraded the Swiss pharma supplier to neutral from buy, saying that 2026 will be another year of “muted organic growth” for the firm.
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