June 29 - European equity markets were largely unchanged on Monday, with a rally in technology stocks helping to offset investor caution around an uncertain ceasefire between the United States and Iran.
The pan-European STOXX 600 stood at 636.13 points at 0709 GMT. Technology was the top-performing sector, advancing 1.1% as the broader tech group recovered ground after last week’s selloff, which had marked its biggest weekly decline since mid-March.
A notable mover was Nagarro, which jumped 90% after India’s Persistent offered €81 per share to acquire the AI-led digital engineering firm. The sharp rise in Nagarro followed the sector-wide weakness that left the STOXX index finishing the prior week flat.
Market participants said concerns around elevated valuations in the AI space, together with expectations that central banks could lift interest rates to counter inflationary pressures tied to energy costs, had contributed to increased volatility and a pullback in risk assets last week.
Over the weekend the United States and Iran exchanged fire before both sides agreed to a halt in hostilities and to resume talks. Despite the ceasefire agreement, its tenuous nature kept investors on edge. Crude oil prices rose 0.6% to about $72 a barrel as traders assessed the implications for shipments through the Strait of Hormuz given the interim pause in fighting.
Brokerages responded to the developing geopolitical picture with more optimistic forecasts. Most recently, J.P. Morgan raised its year-end target for European equities, pointing to the strength of corporate earnings and an improved geopolitical backdrop as reasons for a more bullish stance.
Looking ahead, market focus is shifting to the European Central Bank’s Sintra conference, where remarks from Federal Reserve Chair Kevin Warsh and ECB President Christine Lagarde will be closely watched for indications about the likely path of monetary policy.
What this means
- Technology stocks are leading the market rebound after a significant weekly selloff, with large single-stock moves such as Nagarro’s acquisition-driven surge.
- Energy markets remain sensitive to geopolitical developments in the Middle East, with oil prices reacting to the fragile status of the ceasefire and concerns over shipping through the Strait of Hormuz.
- Investors are awaiting central bank commentary at the Sintra conference for further clarity on policy direction, which could influence risk asset performance.