Europe close: Markets mixed as Hormuz blockade sees oil rise further

(Sharecast News) - European markets were mixed on Thursday and oil prices remained above $100 a barrel, as the continued blockade of the Strait of Hormuz outweighed support from the extension of the Iran war ceasefire.

The pan-European Stoxx 600 edged up 0.12% to 614.63, helped by gains in France, where the CAC 40 rose 1% to 8,237.78.

Germany's DAX slipped 0.06% to 24,180.68 and London's FTSE 100 fell 0.19% to 10,457.01.

In commodities, Brent crude futures were last up 0.94% on ICE at $102.87 per barrel, while the NYMEX quote for West Texas Intermediate rose 0.58% to $93.50.

"Markets stand or fall these days on headlines about negotiations," said Chris Beauchamp, chief market analyst at IG.

"Today's headline suggesting a breakthrough had become more likely was sufficient to engender a modest bounce in equity markets.

"Though until talks actually begin, bullish sentiment is likely to remain in check."

Sentiment remained constrained by developments in the Middle East.

Mohammad Bagher Ghalibaf, speaker of the Iranian parliament and the country's lead negotiator, said late on Wednesday that reopening the Strait of Hormuz would be "impossible" while the US and Israel continued what he called "flagrant" breaches of the ceasefire, including the US naval blockade.

Iran's Islamic Revolutionary Guard Corps also said its naval forces had stopped two ships attempting to cross the strait and brought them to shore.

David Morrison, senior market analyst at Trade Nation, said European stock indices were showing "signs of fatigue" and that the region was "starkly exposed to high energy prices as it produces very little itself".

"A significant proportion of Europe's and the UK's imports must pass through the Strait of Hormuz," he added.

"And as things stand, the Strait remains closed and controlled by Iran."

Fresh PMI data paints weaker picture for euro area

Fresh survey data pointed to a deteriorating economic backdrop in the eurozone.

S&P Global's flash eurozone composite PMI fell to 48.6 in April from 50.7 in March, dropping below the 50-mark that separates growth from contraction for the first time in 16 months and reaching its lowest level since November 2024.

Manufacturing activity improved, with the PMI rising to 52.2 from 51.6, its highest level in almost four years, despite severe supply chain disruption linked to the Iran war and supplier delivery times lengthening to their worst since mid-2022.

Services, however, weakened sharply, with the PMI falling to 47.4 from 50.2, marking the first decline in activity in nearly a year and the steepest fall since February 2021.

In the UK, official figures showed public borrowing fell over the full financial year to March, broadly in line with forecasts, even though March borrowing came in above expectations.

Borrowing totalled �12.6bn last month, down �1.4bn from March 2025 and the lowest March figure since 2022, but above economists' forecasts of �10.3bn.

For the year as a whole, borrowing fell 13.1% to �132bn, slightly below the Office for Budget Responsibility's forecast of �132.7bn.

Central government receipts rose 5.6% in March to �102bn and increased 8.4% over the year to �1.23trn, while public sector spending totalled �1.36trn.

The current budget deficit fell 33.1% year-on-year to �50.9bn, though public sector net financial liabilities excluding banks rose to 83.3% of GDP, up 2.3 percentage points.

Other UK data painted a mixed picture.

S&P Global's flash UK composite PMI rose to 52.0 in April from 50.3 in March, signalling an improvement in private-sector output.

The services PMI increased to 52.0 from 50.5, while manufacturing returned to expansion at 51.8 from 49.2.

That brighter PMI reading contrasted with the CBI's latest Industrial Trends survey, which showed UK manufacturing output and orders fell in the three months to April and sentiment deteriorated sharply.

Output volumes fell at a faster pace, with the balance at -27% versus -23% in March, while optimism over the business outlook slumped to -65 from -19 in January.

Consumer sentiment in the UK also weakened further.

GfK's consumer confidence index fell four points to -25 in April, its lowest level since October 2023 and the third consecutive monthly decline.

The forward-looking personal finance measure dropped five points to -4, while expectations for the wider economy over the next 12 months fell to -43 from -37.

The savings index rose five points to 32, suggesting households were building contingency funds.

In the United States, labour market data showed initial jobless claims rose by 6,000 to 214,000 in the week ended 18 April, above expectations for 212,000.

Continuing claims increased by 12,000 to 1.82m, while the four-week moving average rose by 750 to 210,750.

The insured unemployment rate was unchanged at 1.2% in the week ended 11 April.

STMicroelectronics jumps, BioMerieux in the red

Among individual stocks, STMicroelectronics was among the top performers, jumping 14.54% after the chipmaker posted better-than-expected first-quarter sales on strong demand.

Nokia gained 6.35% after investors welcomed strong optical networks growth driven by AI and cloud customers, while Saab rose 3.81%, reversing earlier losses after reporting a bigger-than-expected increase in first-quarter operating profit.

Safran added 2.72% after saying full-year earnings should land at the upper end of guidance following a first-quarter revenue beat, and Dassault Systemes rose 1.39% after reporting first-quarter revenue in line with expectations and maintaining full-year guidance.

BioM�rieux was in the red, tumbling 16.62% after the diagnostics group cut its 2026 outlook.

Reporting by Josh White for Sharecast.com.