(Bloomberg) — European stocks pared earlier losses after Axios reported that the US and Iran had agreed to extend a truce and work toward an agreement to end the war.
The Stoxx 600 index was 0.5% lower as of 3:53 p.m. in London, after falling as much as 1% in earlier trading. Real estate shares, which are sensitive to interest rates, rose as European bond yields moved lower.
Negotiators have reached an agreement on a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran’s nuclear program, but President Donald Trump has yet to give it his final approval, two US officials told Axios.
The European benchmark came close to a record high on Wednesday before the latest clashes between the US and Iran undermined hopes that inflationary pressures in the region would ease soon.
“Europe has been hit very hard,” Aneeka Gupta, director of macroeconomic research at WisdomTree UK Ltd., told Bloomberg TV. She said a peace deal would help improve the broader economy and support a recovery.
Elsewhere, Rheinmetall AG gained as much as 5% after winning a contract to provide military vehicles to German armed forces.
Dassault Systemes SE was down 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.
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