Europe close: Markets rise, oil prices plunge on news Hormuz is 'open'

(Sharecast News) - European equities closed sharply higher on Friday as easing geopolitical tensions in the Middle East lifted investor sentiment, with markets buoyed by a ceasefire between Israel and Lebanon and prospects for renewed US-Iran negotiations.

"US indices hit new record highs and oil prices drop by 10% as Iran declares Strait of Hormuz open for the duration of the Lebanon ceasefire," said Axel Rudolph, chief technical analyst at IG.

The pan-European Stoxx 600 rose 1.56% to 626.58.

Germany's DAX outperformed, climbing 2.27% to 24,702.24, while France's CAC 40 gained 1.97% to 8,425.13.

London's FTSE 100 advanced a more modest 0.73% to 10,667.63, held back by declines in energy and utilities stocks.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "That's also driven some steep falls in oil stocks - which has kept the overall rally in the FTSE index limited to under 1% given the relatively high oil sector weight."

Oil prices plunged as Iran signalled a reopening of key shipping routes.

Brent crude was last down 10.72% on ICE at $88.74 per barrel, while the NYMEX quote for West Texas Intermediate dropped 12.28% to $83.06, after Tehran declared the Strait of Hormuz "completely open" to commercial vessels during the ceasefire period.

Iranian foreign minister Abbas Araghchi said passage would resume via a "coordinated route," though US president Donald Trump stated Washington would maintain its blockade on Iranian ports until a final agreement was reached, adding that negotiations were already largely complete.

"Crude futures prices fell sharply - dropping over 10% to below $86 per barrel and reaching near five-week lows - after Iran signalled a significant de-escalation in geopolitical tensions," Rudolph said.

"Foreign minister Abbas Araghchi confirmed that the Strait of Hormuz has been reopened to commercial traffic during the Israel-Lebanon ceasefire period, easing fears around one of the most critical global oil supply chokepoints."

Euro area trade surplus swings back into positive territory

Economic data showed the eurozone's trade balance swung back into surplus in February, supported by a rebound in machinery and vehicle exports.

The bloc posted a surplus of �11.5bn, compared with a �1.0bn deficit in January and broadly in line with forecasts of �11.7bn.

However, that remained well below the �23.1bn surplus recorded a year earlier, as exports fell 6.7% year-on-year to �232.4bn, while imports declined 2.2% to �220.9bn.

Alstom plunges, Gerresheimer manages gains after turbulent session

Among individual stocks, Alstom plunged 27.15% after the French train maker withdrew its three-year cash flow guidance.

In London, utilities stocks came under pressure after Chancellor Rachel Reeves said the government was exploring ways to decouple electricity and gas prices, with Centrica down 4.96% and SSE falling 5.24%.

Gerresheimer edged 0.85% higher after volatile trading, having initially dropped on reports it rejected a takeover approach from US-based Silgan before recovering into positive territory.

Reporting by Josh White for Sharecast.com.