European shares climbed nearly 1% on Monday as a pause in US-Iran hostilities over the weekend pushed oil prices lower.
The move also improved risk appetite across financial markets.
Investors were also preparing for a closely watched week of corporate earnings from major US technology companies.
The pan-European STOXX 600 index was up 0.8%.
The gains came as markets responded to developments surrounding the conflict between the United States and Iran.
A senior Iranian official told Reuters that Iran would halt attacks if the United States did the same.
The comments came after Washington paused its bombing campaign amid concerns about the depletion of its arsenal.
The potential pause in hostilities helped ease pressure on oil markets.
Brent crude futures fell 6% to around $90 a barrel.
The decline in oil prices weighed on energy stocks, which fell 2%.
Energy stocks were among only two declining sectors in the STOXX 600, alongside utilities.
Travel and Leisure stocks showed gains
Lower oil prices provided a boost to travel and leisure stocks.
The sector led broader gains across European markets, rising 2.4% during the session.
Airlines were among the key beneficiaries of the move.
Lower crude prices improved the sector’s outlook by reducing pressure from fuel costs.
Shares of Lufthansa gained 3.7%.
IAG also advanced 3.7%. Ryanair shares added 3.4%.
The gains in airline stocks helped drive the broader travel and leisure sector higher.
The move also highlighted the impact of oil prices on investor expectations for companies exposed to travel demand and fuel costs.
Meanwhile, energy companies moved in the opposite direction as crude prices declined.
The sector’s 2% fall made it one of the few areas of weakness within the broader STOXX 600 index.
Investors await major US tech earnings
Attention is also turning toward a busy week of earnings from major US technology companies.
Investors will closely examine quarterly results from Microsoft, Meta Platforms, Amazon.com and Apple.
The results are expected to provide insight into whether the rally driven by artificial intelligence has further room to continue.
Markets will scrutinize the companies’ quarterly performances for signs about the strength of the AI-driven rally.
Investors are expected to focus on the results as they assess whether the momentum behind technology stocks can be sustained.
The earnings season is also gathering pace in Europe.
Corporate results from European companies are adding another layer of focus for investors as they assess the performance of major businesses.
Vodafone raises outlook after Safaricom deal
Vodafone shares advanced 3.7% after the telecom company raised its outlook following its Safaricom deal.
The company also said it expects to deliver results at the upper end of its revised range.
The update helped lift Vodafone shares during Monday’s session.
The company’s improved outlook provided a positive development for the broader European earnings season, which is now in full swing.
Overall, European equities began the week on a stronger footing.
Falling oil prices helped improve risk appetite and supported travel and leisure stocks.
At the same time, investors remained focused on geopolitical developments and the potential impact of the US-Iran situation on energy markets.
With major US technology companies set to report quarterly results, attention is now likely to remain divided between developments in financial markets and corporate earnings.
The post European shares rise nearly 1% as oil prices fall on US-Iran pause appeared first on Invezz