European shares rise on optimism over progress in US-Iran talks

European shares moved higher on Friday as investors responded positively to signs of progress in peace talks between the United States and Iran, despite both sides continuing to disagree on several major issues.

The pan-European STOXX 600 index rose 0.5% to 623.79 points by 0703 GMT and was on track to close the week with gains.

Market sentiment improved after comments from US Secretary of State Marcio, who said there had been some good signs in ongoing negotiations.

However, negotiations remain complicated by disagreements over Iran’s uranium stockpile and control of the Strait of Hormuz, a critical shipping route that handles more than 20% of the world’s energy supply.

Investors monitor the impact of Iran negotiations

Analysts believe a potential agreement involving the Strait of Hormuz could support European equities, which have underperformed some global peers in recent months.

Europe’s heavy dependence on imported oil has continued to pressure markets and contribute to inflation concerns across the region.

Investors expect easing geopolitical tensions to improve energy market stability and support broader economic sentiment.

The positive tone in markets also came alongside encouraging economic data from Germany.

Official figures showed German consumer sentiment improved heading into June. Separate data confirmed that Germany’s economy expanded by 0.3% in the first quarter of 2026.

Germany’s benchmark DAX index gained 0.7% following the data releases.

Meanwhile, money markets are pricing in at least two interest rate hikes from the European Central Bank before the end of the year.

Richemont jumps after quarterly revenue beat

Among individual stocks, luxury goods company Compagnie Financière Richemont was one of the strongest performers in early trading.

The Cartier owner advanced 4.2% after reporting fourth-quarter revenue that exceeded market expectations.

The gains in Richemont shares added further support to the broader European market during the session.

European technology stocks track Nasdaq gains

European technology stocks also remained firm, broadly matching the performance of the Nasdaq since April.

According to LSEG data, European technology shares have kept pace with gains in US technology markets, although performance remained below some Asian peers.

South Korea’s stock market has surged 55% over the same period, according to the data.

A report from TS Lombard showed the Nasdaq 100 gained around 21%, while Taiwanese equities climbed roughly 28%.

Investor sentiment toward technology companies has been supported by renewed enthusiasm around artificial intelligence, driven by strong earnings from major US technology firms since early April.

Markets have also reacted positively to Europe’s push to strengthen regional technology infrastructure and improve competitiveness in the sector.

The broader improvement in risk appetite helped support European equities on Friday, with investors closely monitoring developments in both geopolitics and monetary policy.