The Paris stock exchange and others in the Old Continent are regaining some of the lost ground from the previous day, showing a certain resilience as the 15-day ceasefire between Washington and Tehran is set to end Wednesday evening.
Shortly before noon, the CAC 40 gained 0.2% to 8,350 points, while the Euro Stoxx 50 rose by 0.5%, encouraged by the relative resilience of American indices on Monday (such as a 0.3% drop in the Nasdaq 100 at the close).
However, uncertainty still surrounds the war and the possibility of talks between the US and Iran, with Tehran expressing reluctance to negotiate under threat, warning of potential new developments in the battlefield if the war resumes.
The uncertainty regarding the Middle East and the fate of the Strait of Hormuz is naturally reflected in oil prices: Brent is up around 1% to $95, while Texas WTI is similarly rising to $87.
“In the future, oil markets are expected to remain very sensitive to the evolving geopolitical situation in the Middle East,” warned Abdelaziz Albogdady, market research and fintech strategy manager at FXEM.
Persisting tensions could continue to drive prices up, while a credible de-escalation or stable maritime transport conditions could trigger a new wave of massive sales.
Illustrating the impact of geopolitical context on market sentiment, the ZEW index plunged into negative territory this month, falling to -17.2 after -0.5 in March, well below economists’ expectations of a decline to around -5.
The German investor confidence indicator for the country’s economic outlook has dropped below its April 2025 low of -14, down from 58.3 in February.
“The economic consequences of the war in Iran for the German economy go beyond a simple price increase,” explained Achim Wambach, president of the ZEW institute.
According to the economist, German companies are concerned about long-term energy shortages, which hinder investments and dampen the effects of government stimulus measures.
The evaluation of Germany’s current economic situation has also deteriorated for the current month, with the corresponding indicator dropping to -73.7, 10.8 points lower than in March.
In Paris stock news, Thales dropped 4.4% and stands as the weakest performer on the SBF 120 index, as investors penalize the poor results in Cyber and the lack of forecast increases at the release of its activity report.
Despite a dynamic start to the year driven by defense, with a clear increase in orders and nearly 10% organic revenue growth, the electronics group took a hit on the stock market.
Elsewhere in Europe, Safran fell by 2.4% after losing support from Jefferies, who downgraded their recommendation from “buy” to “hold” and reduced their price target from €350 to €310.
In London, AB Foods dropped 3.5% after announcing plans to split off Primark, its low-cost clothing chain, in a context of below-expectation half-year results and deteriorating activity in the sugar sector.
