European stocks finished Thursday in negative territory as investors await the outcome of reports that Washington and Tehran are nearing an agreement to end the war.
The pan-European Stoxx 600 index closed the session down more than 1%, reversing earlier gains. Major regional bourses in London, Paris, Frankfurt and Milan all finished in the red, with the U.K.’s FTSE 100 losing 1.6% on the day.
Norway’s central bank raised interest rates by 25 basis points to 4.25% on Wednesday, the first major central bank to do so since the war in Iran reignited fears of inflation across the globe.
“Inflation is too high and has run above target for several years”, said Norges governor Ida Wolden Bache in a statement.
“The monetary policy outlook does not appear to have changed materially since March, but the war in the Middle East is still causing substantial uncertainty about the economic outlook.”
In corporate news, British energy major Shell on Thursday reported a stronger-than-expected first-quarter profit as the Iran war sent energy prices soaring.
The oil giant posted adjusted earnings of $6.92 billion for the first three months of the year, beating analyst expectations of $6.1 billion, according to an LSEG-compiled consensus. A separate, company-provided analyst forecast had put Shell’s expected first-quarter profit at $6.36 billion.
Shell shares closed 2.9% lower, as the group trimmed the size of its upcoming share buyback.
Meanwhile, shipping giant Maersk reported underlying earnings before interest, tax, depreciation and amortization (EBITDA) of $1.75 billion for the first three months of the year.
It marked a 35% decline from the same period a year earlier, but fell in line with a consensus estimate compiled by LSEG.
Maersk CEO Vincent Clerc described the war as a “new wake up call” in a wide-ranging interview on CNBC’s “Squawk Box Europe.”
Shares in the Danish company, widely seen as a bellwether for global trade, plunged during Thursday trading, closing 9.9% lower.
Europe’s market reversal followed Asian markets’ muted movements overnight after U.S. President Donald Trump said that a deal was not finalized. He added that it was “perhaps, a big assumption” that Iran would accept the proposal. The president threatened to resume military strikes if it did not comply.
“If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before,” the president wrote in a Truth Social post.
An Iranian foreign ministry spokesperson told CNBC on Wednesday that Iran was evaluating a U.S. proposal for a resolution.
On Wednesday evening, Israel struck Beirut in Lebanon for the first time since the fragile ceasefire with Hezbollah was agreed on April 16.
Meanwhile, millions of people in the U.K. will go to the polls for local elections, offering the widest gauge of public opinion since the general election in July 2024.
The results will decide who runs local public services. Keir Starmer’s Labour party controls the majority at present but is slated for heavy losses across the country.
