Europe close: Stocks fall as US-Iran ceasefire optimism wanes

24th Apr 2026 17:34

(Sharecast News) - European shares fell on Friday as optimism around the Iran war ceasefire continued to fade, leaving continental markets on course for their first weekly loss in more than a month.

The pan-European Stoxx 600 was down 0.58% at 610.65.

Germany's DAX slipped 0.11% to 24,128.98, France's CAC 40 fell 0.84% to 8,157.82, and London's FTSE 100 declined 0.75% to 10,379.08.

"While US stock indices extend their gains amid solid earnings and hope for a second round of US-Iran talks, European stocks give back recent gains amid persistently high energy costs and as German business confidence hits a six-year low," said Axel Rudolph, chief technical analyst at IG.

"After four weeks of falling prices crude has risen by over 10% in the course of this week with Brent oscillating around the $100 per barrel mark.

"US consumer sentiment hitting its lowest level on record hasn't dampened the bullish mood ahead of the weekend."

Sentiment remained fragile after US president Donald Trump announced a three-week extension to the ceasefire between Israel and Lebanon, but gave little clarity on the timeline for a longer-term peace deal with Iran.

Asked how long he was willing to wait, Trump replied: "Don't rush me."

He said on Truth Social that talks at the White House involving vice president JD Vance, secretary of state Marco Rubio and the ambassadors to Israel and Lebanon had gone "very well".

"The United States is going to work with Lebanon in order to help it protect itself from Hezbollah," Trump said.

"The Ceasefire between Israel and Lebanon will be extended by THREE WEEKS.

"I look forward in the near future to hosting the Prime Minister of Israel, Bibi Netanyahu, and the President of Lebanon, Joseph Aoun.

"It was a Great Honor to be a participant at this very Historic Meeting."

Investors also watched for signs of renewed US-Iran diplomacy.

Iranian foreign minister Abbas Araghchi was reportedly expected to arrive in Islamabad on Friday night for a possible second round of peace talks with the US.

Bloomberg, citing Pakistani officials familiar with the matter, reported that a US logistics and security team was already in Islamabad to prepare for talks, although the timing of negotiations was unclear.

The US and Iran had been due to hold talks earlier in the week, but Trump cancelled plans to send Vance on Tuesday after extending the ceasefire with Iran.

Patrick Munnelly, market strategy partner at TickMill, said: "The FTSE 100 slipped on Friday and headed for its first weekly decline in five weeks, as fading confidence in a swift resolution to the Iran conflict pushed investors back into a more defensive stance.

"Risk appetite was further unsettled by a warning from Bank of England deputy governor Sarah Breeden that global equity markets remain vulnerable because valuations are not fully reflecting the scale of risks facing the world economy.

"Rising crude prices and stalled efforts to reopen the Strait of Hormuz kept geopolitical tension firmly in focus, weighing on sentiment across London and hitting travel and leisure particularly hard, with Wizz Air among the notable fallers.

"Banks including Barclays and HSBC also came under pressure, while the FTSE 250 underperformed as investors cut exposure to more domestically and economically sensitive names."

German business sentiment deteriorates in April

Economic data added to the cautious tone.

German business sentiment deteriorated in April to its weakest level since May 2020, with the Ifo Institute's business climate index falling to 84.4 from 86.3 in March.

The expectations index declined to 83.3 from 85.9, while the current situation index fell to 85.4 from 86.7.

Manufacturing weakened to -15.5 from -14.4, services dropped to -11.0 from -5.1, trade fell to -32.6 from -24.6 and construction declined to -24.0 from -15.0.

"Companies are considerably more pessimistic about the coming months. They also assessed their current situation as worse. The German economy is being hit hard by the Iran crisis," said Ifo president Clemens Fuest.

In the UK, retail sales unexpectedly rose in March as consumers rushed to buy fuel after the outbreak of war in the Middle East.

The Office for National Statistics said retail sales volumes increased 0.7% after a 0.6% decline in February, against expectations for no change.

Fuel sales rose 6.1%, the strongest monthly increase since April 2021, while sales excluding automotive fuel were up 0.2%.

Clothing sales also increased, helped by better weather, while computer and telecoms stores and non-store retailers benefited from new product launches.

Retail sales rose 1.6% over the January-to-March quarter.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said much of the strength came from the rebound in fuel sales, warmer weather and seasonal spending, while the underlying picture was less convincing.

"Consumer confidence has already started to roll over and, with inflation and unemployment expected to rise from here, the risk is that this strength proves short-lived, with growth likely to stall in the coming months," he said.

"That backdrop should keep the Bank of England cautious next week, and we expect rates to remain at 3.75%, but the messaging is likely to stay cautious as policymakers remain wary of lingering inflation pressures and the risk of second-round effects."

Tomra Systems slumps as Hiab surges

Among individual stocks, Tomra Systems slumped 24.24% after the Norwegian recycling specialist missed first-quarter revenue estimates.

Sweden's Indutrade dropped 15.26% after earnings fell more than expected, while Mondi lost 11.12% following a significant decline in first-quarter core earnings.

On the upside, Hiab rose 9.18% after the on-road crane maker lifted its profit margin guidance.

Reporting by Josh White for Sharecast.com.