(Bloomberg) — European stocks fell on Thursday, failing to entirely recoup their early hefty losses even after Axios reported the US and Iran are close to a diplomatic breakthrough in the war.
The Stoxx 600 index closed 0.5% lower, having earlier shed as much as 1% as traders waited for confirmation of the Axios report which said a 60-day ceasefire extension was under negotiation. The report spurred a rebound in stocks that had struggled throughout the war, including consumer discretionary names and the rate-sensitive real estate sector. However, President Donald Trump has yet to give it his final approval. the report said.
Among single stocks, Dassault Systemes SE fell as much as 7.2% after French firm Mistral AI struck new partnerships with Airbus SE and BMW AG, reviving fears of disruption across the software sector. Rheinmetall AG, meanwhile, gained as much as 5% after winning a contract to provide military vehicles to German armed forces.
The European benchmark had come close to a record high on Wednesday before more clashes between the US and Iran undermined hopes that oil prices and inflationary pressures would soon start to ease.
“Europe has been hit very hard,” Aneeka Gupta, director of macroeconomic research at WisdomTree UK Ltd., told Bloomberg TV, adding that a peace deal would help improve the broader economy and support a recovery.
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