European Stocks Soar Most in a Year on US-Iran Ceasefire

Article content(Bloomberg) — European stocks soared the most in a year as investors rushed to buy stocks in the wake of US and Iran agreeing to a two-week ceasefire in exchange for Tehran reopening the Strait of Hormuz. Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe Stoxx Europe 600 index was up 3.5%, the biggest intraday gain since April 2025. Antofagasta Plc, ArcelorMittal and EasyJet Plc soared more than 13% to lead gains in the index as energy prices tumbled. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article content“Markets have been moving very quickly, setting us up for a relief rally,” said Neil Birrell, chief investment officer at Premier Miton Investors. “That we’ve seen big jumps in the most affected regions and sectors is unsurprising.”Article contentArticle contentThe move on Wednesday was amplified by a large short position in the market and bearish positioning from systematic investors. The equity market is likely to experience a “powerful short squeeze,” as hedge funds and CTAs remove protection that was put in place to hedge the risk of further escalation in the war in Iran, according to Barclays Plc strategists.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“Sharp CTA/HF de-risking, positive April seasonality and a still resilient economic backdrop mean stocks may be prone to a powerful short squeeze and beta rally,” Emmanuel Cau wrote in a note. “The path of least resistance for stocks is likely higher, even if oil surge may not fully reverse.”Article contentThe pan-European Stoxx Europe 600 Index has fallen 6.8% since the conflict in the Middle East broke out at the end of February, leaving it almost unchanged year to date. Article content“One should expect traders to sell oil and defense stocks at the open and buy what suffered most during the crisis, like financials and materials,” said Christopher Dembik, senior investment adviser at Pictet. “For financial markets, this may be the end of an episode but for the global economy, the inflation shock is just beginning, notably for food and materials.”Article contentWhile the ceasefire brought relief to markets, it didn’t address President Donald Trump’s demands for limits on Iran’s nuclear, missile or drone programs. There was no indication the US was prepared to meet Iran’s desire for a permanent agreement and lift sanctions.Article contentTrending Doritos at US$7 a bag ended up costing PepsiCo billions Retail & Marketing Canada's accountant shortage is starting to add up despite quieter tax season Personal Finance Canadian pension plans are so healthy that employers are taking a contribution 'holiday,' says Mercer Retirement William Watson: Open the highway, you crazy New Brunswickers! FP Comment Microsoft vows data centres will not hike Canadians' water and electricity bills Innovation Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Doritos at US$7 a bag ended up costing PepsiCo billions Retail & Marketing Canada's accountant shortage is starting to add up despite quieter tax season Personal Finance Canadian pension plans are so healthy that employers are taking a contribution 'holiday,' says Mercer Retirement William Watson: Open the highway, you crazy New Brunswickers! FP Comment Microsoft vows data centres will not hike Canadians' water and electricity bills Innovation