European stocks rallied on Wednesday after two days of heavy losses, and energy prices retreated, as investors await the latest developments in the Middle East.
“More stability on the markets is welcome not only for sentiment but also as it might give certain investors the confidence to go hunting for bargains and drive a new wave of buying,” said AJ Bell analyst Russ Mould.
Sentiment was boosted on the back of a New York Times (NYT) report that operatives from Iran’s ministry of intelligence have reached out indirectly to the CIA with an offer to discuss terms for ending the conflict.
According to the NYT, citing officials briefed on the outreach, US officials are sceptical – at least in the short term – that either the Trump administration or Iran is really ready for an “off-ramp”.
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Dublin
Dublin-listed home builder Cairn rose 4 per cent to €2.35 after reporting double-digit increases in profit and revenue for last year, while saying it expected housing output to increase by 35 per cent this year and next.
AIB also rose on the back of better-than-expected results, climbing nearly 2.8 per cent. The lender is proposing to pay out €2.25 billion to shareholders to more than quadruple chief executive Colin Hunt’s remuneration after the bank returned to full private ownership last year.
How the conflict in the Middle East is already affecting Irish consumers
Ryanair was the other big mover, rising 2 per cent to €27, amid more positive market sentiment about the conflict in the Middle East, while Kerry Group declined by 1.5 per cent to €70.
Europe
European stocks rose on optimism for a short-lived conflict in the Middle East, rebounding from the biggest two-day decline since April.
The Stoxx Europe 600 gained 1.6 per cent.
The gains were seen even as treasury secretary Scott Bessent said a proposed 15 per cent global tariff may take effect this week.
The European benchmark is still on course for its worst weekly drop since April as the war in Iran enters its fifth day.
Among individual companies, ASM International rallied 5.5 per cent after its fourth-quarter orders beat estimates, indicating investor confidence in semiconductor stocks, a key commodity in the artificial intelligence buildout race. Insurer Scor climbed 4.8 per cent after its net income beat estimates.
“Markets are extremely sensitive to any noise right now. Any news that Iran and the US may start talking will push oil prices lower and stock markets higher,” Joachim Klement, head of strategy at Panmure Liberum, said. “We expect markets to be constantly whipsawed as the situation evolves.”
London
UK shares stabilised on Wednesday after a two-day slump fuelled by an escalating conflict in the Middle East, while shares of housebuilders slumped following mixed results and leadership changes at Barratt Redrow and Vistry.
Heavyweight lenders, which took a beating on economic concerns stemming from the war this week, led the recovery with HSBC, Standard Chartered and Barclays up about 2 per cent each.
The FTSE 100 index closed 0.8 per cent higher, having touched a two-week low in the prior session. The FTSE 250 midcap index firmed 0.9 per cent, rebounding from a two-month low.
The latest survey showed the UK’s services sector grew robustly last month, while job cuts and price pressures persisted. That follows British finance minister Rachel Reeves’ new economic and budget forecasts, which showed unemployment expected to increase further this year.
Housebuilders were a weak spot on Wednesday.
Barratt Redrow fell 3.1 per cent after the UK’s largest home builder said it had appointed Ventia chief executive Dean Banks as its new chief executive, with David Thomas to retire after more than a decade at the helm.
Smaller peer Vistry’s shares slumped 25.6 per cent to the bottom of the midcap index after it warned profit margins would fall in 2026.
New York
Wall Street indexes rose on Wednesday as investors weighed a report that Iranian operatives secretively reached out to the US to pursue talks to end the conflict, while US president Donald Trump’s assurance to stabilise oil markets also boosted sentiment.
Investors scooped up tech-related stocks that sold off heavily in February, with Nvidia up 1.6 per cent, Amazon.com adding 3.4 per cent and Applied Digital jumping 9.1 per cent.
Travel stocks that took a hit earlier in the week on higher oil prices were mixed on Wednesday.
American Airlines and Norwegian Cruise were up about 2 per cent each, while Royal Caribbean lost 1.8 per cent.
On the other hand, oil and gas producers such as ConocoPhillips and Cheniere Energy declined 2.8 per cent and 0.8 per cent. The energy sector led declines on the S&P 500 with a 1.4 per cent fall.
Several Middle Eastern countries have temporarily halted oil and gas production and the US was looking to expand its campaign inside Iran. – Additional reporting: Wires
