European shares rise as oil prices slip on fragile US-Iran ceasefire

European shares rose on Wednesday, recovering from a sharp drop in the previous session, as oil prices retreated after peace negotiations between Washington and Tehran remained deadlocked.

The pan-European STOXX 600 was up 0.7% at 611.06 points, as of 0703 GMT. The index closed more than 1% lower on Tuesday.

Regional bourses also moved higher, with Spain’s IBEX 35 and Germany’s DAX adding 0.6% and 0.7%, respectively.

Ahead of a high-stakes summit in Beijing, U.S. President Donald Trump said he does not think he will need China’s help to end the war with Iran, even as hopes for a lasting peace deal dwindled and Tehran tightened its grip over the Strait of Hormuz.

Negotiations between Washington and Tehran have stalled with both sides unable to reach an agreement.

“Concerns over supply disruptions and uncertainty surrounding the Middle East are keeping oil prices well-supported, even as traders struggle to establish a clear direction,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

With first-quarter earnings winding up, corporate profits in aggregate are expected to rise at their fastest pace in three years. European earnings are expected to have grown 10.2% for the quarter, according to LSEG-compiled data.

Among early movers, shares of Merck jumped 8% after the German firm lifted its forecast range for full-year adjusted operating proit.

Allianz rose 1.6% after the insurance company posted a 52% rise in first-quarter net profit.