European stocks rally on US-Iran ceasefire proposal

Wednesday 25 - 17:30

By: Dakir Madiha

European stocks rally on US-Iran ceasefire proposal

European markets surged Wednesday after reports of a US ceasefire proposal to Iran sparked hopes for de-escalation in the month-old Middle East conflict. The advance lifted travel and finance stocks while pushing oil below $100 a barrel.

The STOXX 600 rose 1.3% to 586.73 points mid-morning in London, recouping losses from a volatile war-tied week. London's FTSE 100 gained nearly 0.9%, Paris CAC 40 climbed 1.4%, and Frankfurt's DAX jumped 1.7%. S&P 500 futures rose 0.7%; earlier Asian markets in Japan, South Korea, and Australia advanced up to 3%.

Reports detailed a 15-point US plan relayed to Tehran, first from Israel's Channel 12 and confirmed by Associated Press. It covers sanctions relief, dismantling Iran's nuclear program, IAEA monitoring, missile curbs, and Strait of Ormuz reopening. US envoys Jared Kushner and Steve Witkoff seek a one-month truce for talks, possibly in Islamabad this weekend.

President Donald Trump said Tuesday progress occurred, but Tehran rejected it outright. An Iranian military spokesman mocked the effort Wednesday, claiming Americans "negotiate with themselves." The parliament speaker labeled direct talks reports "fake news."

Brent crude fell over 5% to around $99 per barrel; West Texas Intermediate hit $88. Airlines led gains: Lufthansa up 2.4%, Air France 3.7%; travel and leisure rose 2%, banks 1.6%. Yet losses since war erupted February 28 persist; STOXX 600 sits 11% below its January peak after entering correction territory as oil neared $120 and Ormuz handling one-fifth of global oil and gas closed.

Goldman Sachs now expects two ECB rate hikes this year, reversing prior cut forecasts. Analysts urged caution. Ormuz stays mostly shut; US, Israeli, and Iranian strikes continue despite diplomacy. Macquarie warned Brent could hit $150 if disruptions last into April. Emirates NBD's Daniel Richards noted oil prices swing on regional headlines amid uncertain peace prospects.