Europe close: Markets manage gains amid fragile US-Iran ceasefire

10th Apr 2026 16:19

(Sharecast News) - European equities edged higher on Friday, with the pan-European Stoxx 600 closing up 0.43% at 615.23, as investors balanced cautious optimism over a fragile US-Iran ceasefire against escalating geopolitical tensions in the Middle East.

Germany's DAX rose 0.2% to 23,855.19 and France's CAC 40 gained 0.19% to 8,261.12, while London's FTSE 100 slipped 0.03% to 10,600.53.

Oil prices moved higher, with Brent crude futures last up 1.02% on ICE at $96.90 per barrel, and the NYMEX quote for West Texas Intermediate ahead 1.21% at $99.05.

"Even though significantly higher US inflation is complicating the Fed's outlook, markets seem more interested in the outcome of US/Israel/Iran ceasefire talks," said Axel Rudolph, chief technical analyst at IG.

Sentiment remained fragile as both Washington and Tehran accused each other of breaching the terms of the two-week truce, while Israel's continued airstrikes on Lebanon drew widespread international condemnation.

US president Donald Trump said Iran was "doing a very poor job" of allowing oil to pass through the Strait of Hormuz, warning: "There are reports that Iran is charging fees to tankers going through the Hormuz Strait - They better not be and, if they are, they better stop now!"

Peace talks were scheduled to take place in Pakistan over the weekend, offering a potential avenue for de-escalation.

"Despite coming off by more than 10% during the week, crude prices remain elevated - close to $100 per barrel - as ongoing Middle East tensions, including Israeli strikes in Lebanon and the continued closure of the Strait of Hormuz, keep supply risks elevated in spite of a US-Iran two-week ceasefire announcement," Rudolph added.

"The situation remains fragile, with shipping still largely halted, Saudi output reduced by around 600,000 barrels per day following attacks, and key infrastructure damaged, while diplomatic efforts continue with further talks scheduled."

German inflation rises in March, UK retail football improves

Economic data underscored the inflationary impact of the conflict.

In Germany, consumer price inflation rose to 2.7% year-on-year in March, the highest level in more than two years, driven by a 7.2% increase in energy prices, including a 20% surge in motor fuels and a 44.4% jump in heating oil.

The harmonised index of consumer prices stood at 2.8%, while core inflation remained steady at 2.5%.

The rise in energy costs reflected ongoing disruption linked to the war in the Gulf and the restricted flow of oil through the Strait of Hormuz.

In the UK, retail footfall rose 2.4% year-on-year in March, supported by the earlier timing of Easter, though industry figures cautioned that underlying demand remained weak and heavily influenced by seasonal factors.

The ongoing conflict in the Middle East continued to weigh on consumer confidence, raising the risk of renewed pressure on the cost of living.

Across the Atlantic, US inflation accelerated sharply in March, with consumer prices rising 0.9% month-on-month and 3.3% year-on-year, as energy costs surged 10.9%.

At the same time, US consumer sentiment deteriorated markedly, with the University of Michigan's index falling 11% to a record low of 47.6, reflecting heightened concerns over rising prices and weakening financial conditions.

Sodexo in the red, defence stocks on the back foot

In equities, shares in Sodexo plunged 10.33% after the French catering group cut its full-year sales and profit guidance, citing execution challenges and a review of contracts and assets.

Defence stocks also declined, with Rheinmetall down 5.9%, Renk falling 4.41% and Hensoldt losing 5.79%.

Sweden's Saab dropped 2.2% and the UK's BAE Systems shed 2.67%, after signs emerged that negotiations between Ukraine and Russia could be progressing towards a potential resolution.

Reporting by Josh White for Sharecast.com.