FRANKFURT: European shares jumped more than 1 percent on Thursday and marked their biggest monthly gain in over a year, as investors were relieved by better-than-expected corporate earnings and hopes of a resolution to the US-Israeli war on Iran.
The pan-European STOXX 600 closed 1.4 percent higher at 611.28 points, snapping a four-day losing streak. Regional bourses also moved higher; Germany’s DAX and UK’s FTSE rose more than 1.4 percent each.
The STOXX index rebounded from sharp declines in the previous month, logging a 4.8 percent gain in April — its best monthly showing since January 2025. However, the index is still trading below pre-war levels.
“The market is really struggling to take in all the information that it’s been given at the moment and adjust the pricing accordingly,” said Michael Field, chief European equity strategist at Morningstar.
Hopes for an imminent end to the conflict had helped buoy markets earlier this month, but negotiations have stalled and crude prices are trading above USD100.
Against this backdrop, the European Central Bank left interest rates unchanged, but signalled concerns over rising inflation, spurring bets that it would lift borrowing costs by 25 basis points more than once this year, with an initial move expected in June.
“If you look at where we are currently trading in energy markets, the market is now basically trading closer to the ECB’s adverse scenario … it is more likely that the ECB would have to take some form of action in the short to medium term,” said Elwin de Groot, head of macro strategy at Rabobank.
On the day, industrial and healthcare shares boosted the index, gaining 1.7 percent and 2.2 percent, respectively. The utility sector was up 2.1 percent.
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