Europe close: Stocks stage late recovery to close in the green

4th Jun 2026 17:34

(Sharecast News) - European stocks returned to positive territory by the close on Thursday, recovering from earlier losses even as Israel undermined a US-backed ceasefire agreement with the Iran-backed Hezbollah militia within hours of it being announced.

The pan-European Stoxx 600 rose 0.52% to 624.45.

Germany's DAX gained 0.6% to 24,944.95, France's CAC 40 advanced 1.15% to 8,244.29, and London's FTSE 100 added 0.27%.

In commodities, Brent crude futures were last down 2.78% on ICE at $95.09 per barrel, while the NYMEX quote for West Texas Intermediate dropped 3.07% to $93.07.

Chris Beauchamp, chief market analyst at IG, said: "It feels like we have seen this movie before, multiple times, but new ceasefire reports have helped push oil prices lower after three days of gains.

"Whether this is an actual ceasefire or one of Trump's ceasefires that involves opponents still firing at each other remains to be seen, but as this week's inventory draws have shown, the global economy continues to run out of oil."

Sentiment was tested after Israeli defence minister Israel Katz said the Israel Defence Forces would continue ground operations in southern Lebanon, including in the recently occupied Beaufort Castle, and that displaced residents would not be allowed to return.

Katz said the IDF would "continue its fire and ground operations" in Lebanon up to the "yellow line", while retaining "freedom of action, with American backing" to strike Beirut in response to attacks on Israeli territory.

The US-backed ceasefire was contingent on Hezbollah halting fire and evacuating fighters from the area south of the Litani river, according to a joint statement released by Washington.

However, Israel carried out multiple drone strikes in the Nabatieh area of southern Lebanon on Thursday morning.

The deal was also not ratified by Hezbollah itself, with the Lebanese government conducting negotiations as it attempts to weaken the militia's grip on the country.

Patrick Munnelly, market strategy partner at TickMill, said the FTSE 100 had fallen to its lowest level in more than two weeks earlier in the session, hit by sharp declines in Asia-focused lenders, insurers and miners after reports of tighter offshore banking restrictions in China, before staging a sharp reversal in line with a broader improvement in global risk sentiment.

"The session began with a clear risk-off tone, as investors cut exposure to companies most reliant on Asian financial flows and Chinese demand, while lower crude prices added another drag through the energy sector," he said.

Euro area retail sales fall in April

On the economic front, eurozone retail sales fell in April after March's growth was revised sharply higher.

Eurostat said retail trade volumes declined 0.4% month-on-month, slightly worse than expectations for a 0.3% fall, while March was revised to show 0.8% growth, the strongest increase since August 2024.

Food, drinks and tobacco sales rose 0.9% in April, but automotive fuel sales fell 2.7% and non-food sales excluding fuel dropped 0.9%.

The eurozone construction downturn eased slightly in May, though activity remained weak.

The S&P Global construction PMI rose to 43.7 from April's 20-month low of 41.7, with all three main sectors still contracting.

New orders continued to fall, input cost inflation remained well above its long-term average and lead times lengthened to their worst since December 2022.

Usamah Bhatti, economist at S&P Global Market Intelligence, said shipping delays, higher fuel costs and transport pressures linked to residual disruption from the Middle East war continued to weigh on the sector.

In the UK, construction output fell at the fastest pace in six years.

The S&P Global construction PMI dropped to 38.2 in May from 39.7 in April, remaining below the 50 mark for a 17th consecutive month.

Excluding the pandemic shock, the decline was the steepest since March 2009.

Residential activity was the weakest segment, while commercial work also softened sharply.

Tim Moore, economics director at S&P Global Market Intelligence, said economic uncertainty and rising inflation after the Middle East conflict had triggered the steepest fall in new work since the start of the pandemic.

He added that fuel surcharges, higher prices for energy-intensive raw materials and international shipping delays were continuing to strain supply chains, while business optimism had fallen sharply since the start of 2026.

In the US, initial jobless claims rose more than expected to their highest level since February.

The Department of Labor said claims increased by 13,000 to 225,000 in the week ended 30 May, compared with expectations for 213,000.

Continuing claims slipped by 8,000 to 1.77m, while the four-week moving average rose to 214,750.

CMC Markets surges, Universal Music in the red

In equity markets, CMC Markets surged 16.85% after the trading platform said 2027 operating income would beat analyst forecasts.

Munnelly said CMC was the standout bright spot.

"The trading platform's update provided a sharp contrast to the broader market weakness and showed that investors remain willing to reward companies with clear earnings momentum, especially where volatility and market activity can support revenue."

On the downside, Universal Music Group fell 4.87% after Bill Ackman's Pershing Square exited its €1.4bn stake in the company, just days after the world's largest music group rejected a takeover proposal from the hedge fund billionaire.

Bolloré also slipped 1.35%.

The French conglomerate's controlling family, which owns a stake in Universal Music Group, last week urged the label to reject Pershing's takeover offer, saying it undervalued the company.

Reporting by Josh White for Sharecast.com.