European stock markets opened higher on Friday, buoyed by cautious optimism that US-Iran negotiations may be nearing a breakthrough. The DAX in Frankfurt rose 0.64%, led by Deutsche Post AG which gained 3.61%. Paris's CAC 40 added 0.65%, with STMicroelectronics surging 3.43%. London's FTSE 100 climbed 0.38%, supported by 3i Group up 2.31%, while the Euro Stoxx 50 rose 0.88%.
The euro and pound sterling traded broadly flat against the dollar, at $1.161 and $1.342 respectively around 9 am CET. Germany provided some positive news: the eurozone's largest economy posted expected first-quarter growth of 0.4% year-on-year, and consumer confidence for June showed improvement — a tentatively encouraging signal for an economy that has struggled recently.
Asian Markets Extend the Rally
Tokyo's Nikkei 225 led regional gains with a 2.7% rise to 63,339, helped by data showing Japanese inflation fell to a four-year low of 1.4% in April — a notable cooling even as the Iran conflict kept energy prices elevated. The figures gave markets room to breathe at a time when inflation has been a source of acute global anxiety.
Taiwan's Taiex closed 2.2% higher, while Hong Kong's Hang Seng gained 0.9% to 25,612, and the Shanghai Composite rose by the same margin to 4,112. South Korea's Kospi edged up 0.4% to 7,847, Australia's S&P/ASX 200 added 0.4% to 8,657, and India's Sensex rose 0.6%.
The moves followed a muted but positive session on Wall Street. The S&P 500 added 0.2% to 7,445, the Dow Jones Industrial Average rose 0.6% to 50,285, and the Nasdaq edged up 0.1% to 26,293. Nvidia slipped 1.8% despite better-than-expected quarterly results, with some analysts still viewing the stock as undervalued — a sign that even strong numbers are being met with caution in the current climate.
Oil Climbs as Hormuz Disruption Drags On
Oil prices remained under upward pressure. In the European opening, Brent crude was up by 2.3% at $104.97 a barrel — up sharply from around $70 before the conflict began in late February — while US benchmark crude rose 1.8% to $98.10. At the heart of the pressure is the Strait of Hormuz, the narrow waterway between Iran and Oman through which around a quarter of the world's seaborne oil trade passes. Shipping activity there remains well below pre-war levels, and with US-Iran talks continuing without resolution, there is little sign of an early return to normal flows.
"Markets are still searching for signs of progress in a potential deal between the US and Iran," ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note on Friday. "While there are signs of optimism, uncertainty reigns."
In Washington, Republican congressional leaders declined to hold a scheduled Thursday vote on a Democratic war powers resolution that would compel President Donald Trump to withdraw from the conflict, after it became clear they lacked the numbers to defeat the bill. The vote has been pushed to June.
Elevated oil prices have fed directly into bond markets, where higher inflation expectations push yields up and asset prices down. The yield on the US 10-year Treasury stood at 4.57% on Friday, easing from above 4.67% earlier in the week — when the surge had threatened to weigh on stocks, property and other rate-sensitive assets worldwide. The euro was trading at $1.1605, down slightly on the day, while the US dollar rose to 159.12 Japanese yen from 158.98.
For Europe, the ongoing uncertainty over energy costs adds to existing economic headwinds. The UN recently cut its global growth forecast partly due to the Middle East crisis driving energy costs, a trend that directly impacts European consumers and businesses.
Lenovo Surges 20% on Bumper Earnings
In corporate news, shares of Hong Kong-listed Lenovo Group skyrocketed more than 20% after the technology company's fourth-quarter results far exceeded analyst expectations. Revenue came in at $21.6bn (€18.7bn), a 27% rise year-on-year. The biggest driver was Lenovo's PC, tablet and smartphone division, which posted about a 20% jump in revenue, with its PC and smart devices unit recording its strongest quarterly growth in five years. The stock was trading 20.3% higher at HK$15.82 (€1.87) by mid-morning in Europe.
