Europe close: Stocks gain as oil prices ease but telecoms buck trend
European shares rallied on Friday as oil prices eased off their highs following a pledge from US President Donald Trump not to bomb Iran before American midterm elections on 3 November.
The benchmark Stoxx 600 index ended up 1% at 631.55, Germany’s DAX rose 1.1% to 25,087.27 and France’s CAC 40 closed up 1% at 7,803.33. Meanwhile, Brent crude was up 0.2% at $104.45 a barrel, having topped $105 on Thursday, and West Texas Intermediate was 0.4% higher at $91.83.
In a post on Truth Social on Thursday, the US President said: "We are having productive discussions with the Islamic Republic of Iran. I want to make it clear to everybody that, while Iran is in very bad condition, both Economically and Militarily, and while the Blockade will remain in full force and effect, with Oil flowing in Record Numbers of Barrels through the Hormuz Strait (22 Million Barrels, last night alone, with not one barrel coming from, or going to, Iran!), we will not be attacking Iran at any time prior to the Midterm Elections to be held in the United States on November 3rd."
Oil prices also eased after reports that China is set to resume fuel exports, following a pause in shipments during the Golden Week holiday. Traders said the return of Chinese cargoes is expected to help replenish tight global supplies of diesel, gasoline and jet fuel, adding to the downward pressure on crude.
Chris Beauchamp, chief market analyst at IG, said: "This week has been yet another demonstration of how oil moves everything else in markets. The commodity’s boost on expectations of a US strike on Iran was reversed yesterday, but it leaves the underlying tensions and problems in the Middle East unchanged.
"So long as tanker and insurance rates remain at their current painful levels, a sustained decline in oil prices is much less likely, even if flows are holding up well."
In equity markets, telecom stocks were under the cosh after SpaceX agreed to buy a nationwide low-band spectrum portfolio that it said would "pave the way for Starlink Mobile to become a major mobile carrier in the US".
Deutsche Telekom, Telefonica, Orange, Airtel Africa, Vodafone and BT Group all fell sharply, along with Swisscom.