Europe close: Stocks manage gains despite Middle East tensions
9th Jul 2026 16:26
(Sharecast News) - European stocks held gains on Thursday despite the latest exchange of strikes between the US and Iran overnight.
The pan-European Stoxx 600 rose 0.78% to 640.88.
Germany's DAX gained 0.83% to 25,104.12 and France's CAC 40 advanced 0.9% to 8,326.62, while London's FTSE 100 slipped 0.16% to 10,472.45.
In commodities, Brent crude futures were last down 1.76% on ICE at $76.65 per barrel, while the NYMEX quote for West Texas Intermediate dropped 1.95% to $72.09.
Chris Beauchamp, chief market analyst at IG, said stocks were continuing to recover from Wednesday's losses, albeit cautiously.
"While the attacks in the Middle East appeared to intensify overnight, there has been little dramatic rhetoric today, leading to hopes that any renewed conflict can be avoided," he said.
"But the weekend is not far off, and the US has shown a preference for strikes over a weekend, leading to some caution in markets despite a stronger open for the US."
Beauchamp said lower oil prices had added to the more positive tone across global markets, although "a potential second round of full-blown conflict looms large in everyone's minds".
US forces were cleared to carry out another round of strikes against Iran, with Central Command confirming that it had hit additional sites in an effort to further degrade Tehran's ability to attack shipping in the Strait of Hormuz.
The strikes hit around 90 military targets, including air defence systems, coastal surveillance assets, and missile and drone storage sites, according to a statement.
US president Donald Trump told a news conference at the Nato summit in Turkey that he was no longer sure he wanted to make a deal with Iran, just 24 hours after saying the current ceasefire was "over".
"We can play games, but I'm not sure I want to make a deal," Trump said, adding: "Let's just finish the job."
Patrick Munnelly, market strategy partner at TickMill, said London had extended Wednesday's losses, with healthcare, energy and consumer goods weighing on the FTSE 100.
However, he said the downside had been limited by gains in banks, miners and selected technology-linked stocks.
"The broader tone remained cautious as investors tracked another escalation in the Middle East and its implications for oil, inflation and Bank of England policy," he said.
Munnelly said the geopolitical backdrop remained tense, with markets trying to judge whether the latest US strikes represented a short tactical escalation designed to force negotiations or the start of a more durable re-escalation.
"Oil remained elevated but did not break decisively higher," he said.
"That left the market in a difficult position: energy risk is clearly back, but oil has not yet moved far enough to force a full repricing of inflation, rates and earnings."
US jobless claims unexpectedly fall, Germany trade surplus widens
On the economic front, US jobless claims unexpectedly fell last week to their lowest level since mid-May.
The Department of Labor said seasonally adjusted initial claims declined by 2,000 to 215,000 in the week to 4 July, below expectations for 218,000.
The previous week's reading was revised up by 2,000 to 217,000.
The four-week moving average fell by 3,750 to 218,750, its lowest level in around a month.
Continuing claims rose by 8,000 to 1.81m, although the previous week's figure was revised down by the same amount.
Germany's trade surplus meanwhile unexpectedly widened in May as exports climbed to their highest level in three and a half years, driven by strong demand from the US.
The surplus rose to €19.1bn from a revised €14.7bn in April, ahead of expectations for €14.8bn.
Exports rose 0.9% on the month to €137.9bn, beating expectations for a 0.3% fall and reaching their highest level since September 2022.
Exports to EU countries fell 1.1% to €78.3bn, but shipments to non-EU countries jumped 3.6% to €59.6bn.
Exports to the US rose 23.1% month-on-month and 15.4% year-on-year to €14.1bn, while exports to China increased 7.1% to €6.1bn.
Imports from EU countries fell 2.5% to €59.5bn, while non-EU imports declined 2.6% to €59.4bn.
In the UK, house prices remained subdued in June as the cost of living and geopolitical tensions weighed on sentiment.
The Royal Institution of Chartered Surveyors said its house price balance was -33, compared with -34 in April and -35 in May, indicating broadly unchanged prices month-on-month.
New buyer enquiries improved from May but remained negative at -29, while newly agreed sales stood at -32.
Near-term price expectations were also subdued at -32, though less negative than May's -44, while the 12-month expectations balance edged up two points to 8.
Munnelly said the Rics survey suggested housing sentiment may be stabilising, but not yet recovering decisively.
"Recent data continue to show a rate-sensitive market under pressure: construction PMI remains deeply contractionary, mortgage approvals have weakened, and consumers are still facing elevated borrowing costs," he said.
Tech stocks in the green, AstraZeneca slumps
In equity markets, Computacenter surged 7.21% after a trading update.
Technology stocks were generally back in favour, with BE Semiconductor Industries up 5.59% and STMicroelectronics 7.16% higher.
Bytes Technology rose after the software, AI and cloud services provider said trading had been strong in the first four months to 30 June.
On the downside, AstraZeneca tumbled after the company said its nerve-disease drug Wainua failed to meet its target in a late-stage trial to reduce cardiovascular-related deaths.
Beauchamp said AstraZeneca had trimmed its early losses, helping the FTSE 100 claw back most of its opening fall.
"There hasn't exactly been an unseemly rush to buy today's dip in AstraZeneca; the hit to the revenue forecast is too great for that, but the worst of the losses have been trimmed for now," he said.
"This, together with a positively heroic contribution from the mining sector, has helped the FTSE 100 to claw back most of its opening fall."
Reporting by Josh White for Sharecast.com.