European Stocks Rebound Amid Reports of US-Iran Truce Extension

European Stocks Pared Losses as US and Iran Agree to Extend Truce

European stocks trimmed their losses on Thursday after Axios reported that the US and Iran had reached an agreement to extend a truce and work towards a deal to end the war. The Stoxx 600 index had fallen as much as 1% in earlier trading, but managed to pare its losses and was 0.5% lower by 3:53 p.m. in London.

Real estate shares, which are sensitive to interest rates, rose as European bond yields moved lower. The agreement, which has been reported by Axios, involves a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran's nuclear program. However, the deal still requires approval from President Donald Trump.

The European benchmark came close to a record high on Wednesday, before the latest clashes between the US and Iran undermined hopes that inflationary pressures in the region would ease soon. A peace deal would help improve the broader economy and support a recovery, according to Aneeka Gupta, director of macroeconomic research at WisdomTree UK Ltd.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Elsewhere in the market, Rheinmetall AG gained as much as 5% after winning a contract to provide military vehicles to the German armed forces. However, Dassault Systemes SE was down as much as 7.2% after French firm Mistral AI struck new partnerships with Airbus SE and BMW AG, reviving fears of disruption across the software sector.

Note: The changes in company values are based on the information provided and may not reflect the current market situation.