Europe close: Stoxx 600 jumps 1.9% as oil prices retreat

(Sharecast News) - European stocks rebounded strongly on Tuesday after a market-wide sell-off saw equities across the region sink to a two-month low, as oil prices came back down to earth after their biggest intraday spike in history.

The pan-European benchmark Stoxx Europe 600 index finished 1.9% higher at 606.12, after having closed Monday's session at 594.92 - its lowest finish since 2 January.

Markets across the continent were making significant moves, with benchmarks in London and Paris up 1.6% and 1.8% respectively, Frankfurt up 2.4%, Milan jumping 2.7% and Madrid surging 3.1%. Equities in Zurich, meanwhile, rose just 0.5%.

Oil prices pull back

Brent crude was nearly 14% lower at $85.23 a barrel after Donald Trump looked to rule out a prolonged conflict with Iran, claiming that the war would end "very soon". However, he also stated that US forces would not relent "until the enemy is totally and decisively defeated".

Monday saw Brent briefly soar 29% to $119.50 a barrel before settling 7% higher at $98.96 - as the escalating conflict across the Middle East began to disrupt key energy flows, such as crucial Strait of Hormuz route.

According to the International Energy Agency, export volumes of crude and refined products flowing through the Strait are currently at less than 10% of pre-conflict levels, forcing operators across the Gulf to halt or pull back on production.

A meeting of G7 energy ministers in Paris on Tuesday debated "all available options", according to IEA executive director Faith Birol, including making the 1.2bn barrels of public emergency oil stocks held by IEA member governments available to the market. A further 600m of industry stocks are also held under government obligation, the IEA said.

The IEA then called an extraordinary meeting of IEA member governments to discuss the release of stockpiles, though no decision has yet been made.

"It seems that a combination of Donald Trump's comments about the war ending soon and moves by G7 countries to release strategic oil reserves helped to calm markets, ease energy prices and encourage investors to believe any inflationary pressures may not last as long as some feared," said AJ Bell's head of markets Dan Coatsworth.

In economic news, Germany's trade surplus increased to a 17-month high of �21.2bn in January, up from �17.4bn in December, according to the Federal Statistical Office, as a sharp fall in imports offset a smaller decline in exports.

Oil stocks slump

Shares in oil producers tracked crude prices lower, with BP, Shell, Galp, BP and TotalEnergies all down.

In contrast, manufacturing and industrial stocks gained as concerns about input pricing pressures eased, with oil prices pulling back sharply. Voestalpine, Kion Group and ArcelorMittal were among the best performers on the Stoxx 600.

UK-listed materials stocks RHI Magnesita, Morgan Advanced Materials, Vesuvius, Elementis and Johnson Matthey all rose.

Elsewhere in London, precious metals group Fresnillo jumped after gold and silver prices rose 2.6% and 6.4%, respectively, while housebuilder Persimmon surged after saying underlying operating profit for 2026 was set to be towards the upper end of consensus.

Hugo Boss gained in Frankfurt on stronger-than-expected earnings for 2025, supported by a robust fourth quarter, as the German fashion group prepared for a strategic reset in 2026 aimed at improving profitability and long-term growth.