FRANKFURT: European shares finished at their highest in over a month on Friday, led by technology stocks as risk sentiment got a lift on expectations that a deal to end the Middle East conflict could be near.
The pan-European STOXX 600 ended 0.73 percent higher at 625.12 points and logged its biggest weekly gain in seven.
US Secretary of State Marco Rubio said that there was some progress towards an agreement with Tehran but more work is required, the latest development in the US-Iran impasse that has ensued since Washington suspended bombing in a fragile ceasefire in early April. Key disagreements between Tehran and Washington involve Iran’s uranium stockpile and controls on the Strait of Hormuz.
Reflecting the broader uncertainty, crude prices rose 1 percent to USD103 a barrel.
Analysts expect a deal that includes opening the strategic waterway to lift European equities that have lagged peers, given the region’s dependence on oil imports that have become costly since the war.
“We are neutral on Europe and euro zone equities, given their sensitivity to higher energy costs, while we view the more defensive Swiss market and European healthcare more favourably,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
AI optimism that has driven global indexes to record highs also helped the European tech index rise almost 3.2 percent. Chip giant Nvidia outlined strong forecasts earlier this week, suggesting strong demand for tech infrastructure.
Among European chip stocks, Infineon added nearly 8 percent, STMicroelectronics gained 5.2 percent and ASML rose 4.7 percent.
Also aiding the sector was French President Emmanuel Macron’s comments that the government will invest an additional €1 billion (USD1.16 billion) in its quantum strategy and €550 million to support the microelectronics sector.
Among laggards, Puig tumbled 13.4 percent after the Spanish perfumery ended merger talks with US cosmetics maker Estée Lauder.
Julius Baer fell 6.9 percent after the Swiss bank’s net new money inflows came in below expectations.
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