European shares rise as hopes grow for Middle East ceasefire deal

European shares moved higher on Friday and were on track to finish the month in positive territory as investors responded to expectations that a proposed agreement aimed at extending the Middle East ceasefire and restoring shipping through the Strait of Hormuz could soon be finalised.

The deal also did not address broader and more complex issues, including Iran’s nuclear programme.

The pan-European STOXX 600 index rose 0.3% to 626.91 points by 0715 GMT.

The benchmark index was also on course to end the week higher.

STOXX 600 eyes second consecutive monthly gain

The STOXX 600 had approached record-high levels earlier in the week and remained on track to register a second straight monthly gain.

However, escalating tensions in the Middle East continued to limit broader market advances.

Investors remained focused on developments in the region, with sentiment improving on hopes that a ceasefire-related agreement could help ease disruptions to shipping routes.

The prospect of restored shipping activity through the Strait of Hormuz was viewed positively by markets, given the route’s importance to global energy transportation.

Oil prices retreat after recent gains

Crude oil prices declined and were on track to record their first weekly drop in two months.

Lower oil prices provided some relief to European markets, which are particularly sensitive to energy costs due to the region’s reliance on imported energy resources.

Despite the recent decline in crude prices, elevated energy costs have started affecting consumers.

A preliminary estimate from France showed inflation accelerated in May compared with the previous month.

Investors were also awaiting inflation data from Germany and Italy later in the day, with the figures expected to provide further insight into price pressures across the region.

Defence sector outperforms

Defence stocks emerged as one of the strongest-performing sectors in European markets.

The sector index gained 1.4%, supported by continued geopolitical uncertainty in Eastern Europe.

Tensions between Russia and Ukraine remained high.

Romania, a NATO member, said that a drone injured two people in a southeastern city during an overnight Russian attack on Kyiv.

Defence-related companies often attract investor interest during periods of heightened geopolitical risk, as markets anticipate increased demand for military equipment, technology, and related services.

The sector’s gains reflected investor expectations that ongoing security concerns could support defence spending and procurement activity in the near term.

CTS Eventim jumps on strong quarterly revenue growth

Among individual stocks, German ticketing and live entertainment company CTS Eventim was one of the strongest performers.

The shares surged 11% after the company reported that first-quarter 2026 revenue increased by 23%.

CTS Eventim attributed the growth to strong demand for live entertainment events, which helped drive revenue higher during the quarter.

The stock’s sharp rise made it one of the leading movers in European markets during the session.

Overall, European equities remained supported by optimism surrounding a potential Middle East agreement, while investors continued to monitor inflation trends, energy prices, and geopolitical developments for further direction.