Europe close: Stocks higher as oil prices recover some losses

(Sharecast News) - European shares closed higher on Thursday as oil prices clawed back some of their recent losses, even as the faster pace of ships exiting the Strait of Hormuz eased concerns about near-term supply disruption.

The pan-European Stoxx 600 rose 0.79% to 640.18.

Germany's DAX gained 1.05% to 25,000.54, France's CAC 40 advanced 0.49% to 8,426.96, and London's FTSE 100 climbed 0.65% to 10,529.89.

In commodities, Brent crude futures were last up 1.15% on ICE at $74.59 per barrel, while the NYMEX quote for West Texas Intermediate gained 1.46% to $71.37.

Patrick Munnelly, market strategy partner at TickMill, said London had extended Wednesday's gains, helped by a global rebound in technology sentiment, strong corporate updates and renewed takeover activity across UK-listed companies.

"The FTSE 100 moved higher, with 69 of its 100 constituents trading in positive territory, though losses in energy and some defensives limited the advance," he said.

"The broader benchmark remains in strong shape, having rallied more than 20% over the past year, but Thursday's session again showed the split inside the UK market - equities found support from corporate catalysts and cheap valuations, while the gilt market continued to push back against the political and fiscal backdrop."

At least 20 oil tankers carrying 35 million barrels have exited the Strait of Hormuz since the US and Iran agreed to reopen the vital sea lane, CNBC reported, citing data from trade-flow tracker Kpler.

Confirmed oil shipments through Hormuz have risen to around 4.8 million barrels per day since the deal, with June flows at their highest since the US and Israel attacked Iran on 28 February.

However, exports remain well below pre-war levels, when 15 million barrels per day exited the strait.

Kathleen Brooks, research director at XTB, said oil prices were continuing to fall as the market focused on a potential supply boost from the Middle East, although Brent was firmer on Thursday.

She said the decline in crude had also helped steady global bond markets.

"After remaining firm in recent weeks, Treasury yields finally responded to the large decline in the oil price on Wednesday and yields fell back," she said.

"Brent crude is lower by 1% today and is down 7% in the past 7 days."

US growth revised higher, German consumer sentiment stabilising

On the economic front, US first-quarter growth was revised higher.

The Bureau of Economic Analysis said real gross domestic product increased at an annualised pace of 2.1%, up 0.5 percentage points from the previous estimate and following growth of 0.5% in the final quarter of 2025.

The revision mainly reflected a downward revision to imports, partly offset by softer consumer spending.

The BEA said growth was supported by investment, exports, government spending and consumer spending, while imports increased.

Real value added rose 7.5% in government, 4.5% in private goods-producing industries and 0.8% in private services.

GDP increased in 46 states and the District of Columbia, ranging from growth of 4.5% in Washington state to a decline of 1.6% in South Dakota.

German consumer sentiment showed signs of stabilising, although it remained subdued.

The GfK and Nuremberg Institute for Market Decisions consumer climate indicator ticked up to -29.2 heading into July from a revised -29.7 in June and -33.1 in May.

GfK said slightly stronger income expectations helped, while the willingness to save was unchanged.

Rolf Burkl, head of consumer climate at NIM, said sentiment was stabilising at a low level, but that the willingness to buy remained pessimistic and there were no signs yet of a return to pre-war levels.

He said peace negotiations and lower crude prices were easing inflation concerns, although uncertainty remained high.

UK consumer sentiment also improved in June, according to the British Retail Consortium.

Its state of the economy index rose to -43 from -48, while the personal financial situation index improved to -15 from -16.

Retail spending intentions softened to 5 from 7, but overall spending intentions rose to 16 from 15, while the savings index fell to -9 from -8.

Helen Dickinson, chief executive of the BRC, said the improvement coincided with a lull in the Middle East conflict at the start of June, which eased concerns about higher energy prices and inflation.

She said fast-moving events in the Middle East and at home could either shake confidence again or allow the improvement to gain momentum.

However, UK retail sales fell sharply in June, according to the CBI's distributive trades survey.

Sales volumes for the time of year were judged to be poor, with the balance falling five points to -40, the weakest reading in more than two years.

Retailers also expected sales to remain poor in July, although online sales were forecast to recover strongly, with a balance of 37.

Wholesale sales volumes fell at a slower pace, with the balance improving to -20 from -26, but firms expected a renewed downturn next month at -43.

Martin Sartorius, the CBI's lead economist, described it as a "gloomy start" to the summer, saying weak sentiment and rising cost pressures were weighing on activity across the distribution sector.

Chip stocks rise on Micron cheer

In equity markets, chipmakers gained after US tech group Micron reported record quarterly profits.

Infineon Technologies rose 3.08%, ASML gained 2.59% and STMicroelectronics advanced 2.68%.

Brooks said Micron's results were the main driver of the rebound in technology stocks after a difficult month for the Nasdaq.

"The company reported revenue of $41.46bn last quarter, and gross margin of 85%," she said.

"Next quarter's forecasts were also strong, with $50bn in revenue, $10bn in capex and an 86% profit margin expected."

Elsewhere, easyJet climbed 5.63% after the budget airline rebuffed a sweetened �4.93bn bid proposal from US investment firm Castlelake.

Munnelly said easyJet's move reflected a wider theme of takeover activity across UK-listed companies.

"easyJet rose after rejecting a fourth, sweetened �4.93bn takeover proposal from US-based Castlelake, while still granting limited access to commercial information in hopes of drawing out a higher offer.

"That is a classic 'not at this price' signal and keeps bid speculation alive."

H&M slipped 0.59% after the Swedish fashion retailer reported a smaller-than-expected quarterly profit.

Reporting by Josh White for Sharecast.com.