Ceasefire in Iran: European stock markets up sharply, oil stocks fall sharply

European stock markets open sharply higher this Wednesday. They welcome the announcement of the ceasefire between the United States and Iran in exchange for the reopening of the Strait of Hormuz, which has caused a drop in oil prices.

After a few minutes of trading, the Frankfurt Stock Exchange increased by almost 5% (+ 4.92%), with large capitalizations up sharply such as Siemens Energy (+ 10%) and Airbus (+ 6.88%). The Paris Stock Exchange, after a more timid start, climbed significantly (+ 3.68%), as did Milan (+ 3.93%).

More dependent on major oil stocks announced on the decline, London posted + 2.51%. Indeed, the shares of major oil companies fell sharply at the opening of the main stock exchanges in Europe. In London, BP’s share price plunged 8.35% and that of Shell fell 7.7%. In Paris, TotalEnergies lost 5.63%. Also in sharp decline were ENI (-7.15%) in Milan and Repsol (-8.10%) in Madrid.

Borrowing rates on European sovereign debt fall sharply

In addition, borrowing rates for European sovereign debt fell sharply on Wednesday. A benchmark in Europe, the ten-year German debt borrowing rate fell to 2.92% on Wednesday around 9:15 a.m., compared to 3.08% the day before on the debt market. Its French equivalent rose to 3.55% against 3.77% the day before and that of the United Kingdom fell to 4.71% against 4.90% the day before.

This drop in borrowing rates means in particular that investors are, since the announcement of the ceasefire, less worried about the level of inflation that the continent will experience in the months to come.