European stocks registered small net gains on Thursday as market participants absorbed reports that the United States and Iran are working through mediators to restart negotiations aimed at ending their ongoing war.
By 03:10 ET (07:10 GMT) the pan-European Stoxx 600 had inched up 0.1%. Germany's Dax was up 0.1% and France's CAC 40 rose 0.4%. The FTSE 100 in the U.K. was the notable laggard, slipping 0.3%.
According to the Wall Street Journal, Washington and Tehran have been engaging with third-party mediators on a one-page framework intended to relaunch talks toward a lasting peace deal. The paper reported that talks are expected to begin next week in Pakistan, with the discussions followed by a monthlong process aimed at resolving outstanding disputes over Iran's nuclear program and sanctions relief.
The report emphasized that significant disagreements remain, including on nuclear enrichment and inspection regimes - issues that would need to be addressed during any renewed negotiations.
Market sentiment was further shaped by comments attributed to President Donald Trump, who suggested that the U.S. operation against Iran - conducted jointly with Israel in late February - would end if Tehran "agrees to give what has been agreed to." U.S. stock markets rallied on Wednesday amid fresh hopes that a diplomatic resolution could be forthcoming.
Energy markets reacted to the diplomatic reports. Oil prices fell as traders anticipated the possibility of tanker traffic reopening through the Strait of Hormuz, a key maritime route off Iran's southern coast that handles roughly a fifth of the world's crude and had been effectively closed for much of the conflict. Brent crude futures, the global benchmark, slipped 3.7% to $97.92 a barrel on Thursday.
The modest uplift across much of Europe contrasted with the drop in the U.K. index, leaving investors balancing the potential economic relief from a de-escalation of the conflict against the unresolved hurdles in any negotiation process. Sectors most immediately affected by these developments include energy, shipping, and broader market risk sentiment-sensitive industries.
Market snapshot
- Stoxx 600: +0.1% (03:10 ET / 07:10 GMT)
- Dax: +0.1%
- CAC 40: +0.4%
- FTSE 100: -0.3%
- Brent crude futures: -3.7% to $97.92 a barrel
As the situation develops, investors will watch both diplomatic progress and the practical effects on oil flows closely. Any changes to tanker movements through the Strait of Hormuz are likely to have direct implications for energy prices and related sectors, while the broader market response will depend on whether negotiators can bridge the outstanding technical and inspection-related disagreements.