European stock markets ended in negative territory on Thursday as investors awaited the outcome of reports that the United States and Iran were close to a deal to end the war.
pan-european Stocks 600 The index closed more than 1% lower, reversing earlier gains. The main regional stock exchanges in London, Paris, Frankfurt and Milan all ended in the red, with Britain’s FTSE 100 index down 1.6% on the day.
Norway’s central bank on Wednesday raised interest rates by 25 basis points to 4.25%. It was the first increase by a major central bank since the Iran war reignited inflation concerns around the world.
“Inflation is too high and has been above target for several years,” Norges Governor Ida Walden Bache said in a statement.
“While the outlook for monetary policy does not appear to have changed significantly since March, the war in the Middle East still poses significant uncertainty to the economic outlook.”
In corporate news, British energy giant Shell on Thursday announced better-than-expected first-quarter profits as energy prices soar due to the Iran war.
The oil giant’s adjusted profit for the first three months of the year was $6.92 billion, beating analysts’ expectations of $6.1 billion, according to a consensus compiled by LSEG. Separate analyst estimates provided by the company had predicted Shell’s first-quarter profit of $6.36 billion.
Shell shares closed 2.9% lower after the group scaled back its planned share buybacks.
On the other hand, major shipping companies maersk reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.75 billion for the first three months of this year.
This was down 35% year-over-year, but in line with consensus estimates compiled by LSEG.
Maersk CEO Vincent Clair described the war as “another wake-up call” in a wide-ranging interview on CNBC’s “Squawk Box Europe.”
Shares in the Danish company, widely seen as a bellwether in global trade, fell sharply during trading on Thursday, closing 9.9% lower.
The reversal in European markets followed sluggish moves in Asian markets overnight after US President Donald Trump said a deal was not yet finalized. He added that it was “probably a prerequisite” that Iran would accept the offer. The president threatened to renew military strikes if the country did not comply.
“If they don’t agree, the bombing will begin and sadly it will be at a much higher level and intensity than before,” the president wrote in a post on Truth Social.
An Iranian Foreign Ministry spokesperson told CNBC on Wednesday that Iran was evaluating the US resolution.
On Wednesday night, Israel attacked Beirut, Lebanon, for the first time since a fragile ceasefire with Hezbollah was agreed on April 16.
Meanwhile, millions of people in Britain are set to go to the polls in local elections, providing the widest gauge of public opinion since the July 2024 general election.
The results will determine who will run local public services. Keir Starmer’s Labor Party currently has a majority but is expected to suffer heavy losses across the country.
