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European shares edge up as lower crude offsets the geopolitical uncertainty

European shares edged higher on Thursday, as falling oil prices shifted investor attention to weaker demand. Meanwhile,?U.S. - Iran?peace talks remained stagnant and shipping through the Strait of Hormuz continued to be disrupted.

By 0830 GMT, the pan-European STOXX 600 index was up 0.2% to 660.57. The benchmark fell from its record highs of the previous session.

The FTSE 100 index fell by 0.3% in Britain despite an unexpected expansion of the UK economy in June. This provides some reassurance about the outlook for domestic growth.

Danni Hewson is the head of financial analyses at AJ Bell. She said that June could be "the last sweet spot" for the UK's economy in this year.

She warned that uncertainty about the Iran war, energy costs and possible budget measures may weigh on business confidence.

The U.S. inflation data released on Tuesday broadly met expectations, which eased concerns about a possible Federal Reserve rate increase in the near future. Still, the mood in Europe was subdued. There were few signs of progress in the talks about the blocked Strait of Hormuz or a U.S. Iran peace agreement.

The real issue is how to price in what's happening in the Middle East. David Morrison is a senior analyst at Trade Nation and he said that the market has been pricing in the war's imminent end month after month.

Iran and the United States are still at odds over the efforts to reach a permanent agreement to end the Gulf War, according to an Iranian senior source. She said that there has been no progress made in the talks to revive the interim deal reached in June, and to define a timeline for its implementation.

The oil prices dropped on Thursday as forecasters reduced their expectations for global demand in this year. They cited the "broader economic fallout" from the Middle East conflict.

Energy stocks in Europe fell 0.7% while travel and leisure stocks gained 0.6% due to lower fuel costs.

Basic resources, which includes precious metals and industrial metals, fell 2.9%, despite a 1.2% increase in the banking sector.

Maersk, among other earnings-driven movements, rose 4.6% as the Danish shipping company?smashed its profit forecasts and increased its full-year earning guidance for the second time this season due to the Middle East conflict.

Adyen, the Dutch payments firm, which has clients such as Spotify and Microsoft, was one of the top gainers in the STOXX 600 index, rising 12.2%.

Swissquote fell 10.7% and landed at the bottom of benchmark index after it missed its first-half targets due to low cryptocurrency income. Reporting by Tharuniyaa lakshmi in Bengalur and Ragini mathur; editing by Mrigank dhaniwala

(source: Reuters)