European shares steady, investors eye latest Mideast developments

(Reuters) - European shares were steady on Thursday, as investors assessed whether developments in the ‌Middle East would lead towards a peace deal to end the months-long conflict, while Remy Cointreau rose after the beverage maker announced a turnaround plan.

Crude prices eased about 1% to $96 a barrel after Israel and Lebanon reached an agreement to implement a ceasefire, raising hopes for a broader deal to end the U.S.-Israeli war on Iran.

Wary investors awaited clearer signs that a peace deal could be imminent this time after several rounds that have led nowhere.

The pan-European ⁠STOXX 600 index (.STOXX) inched up 0.1% to 621.85 points by 0849 GMT, with retailers (.SXRP) and luxury stocks (.STXLUXP) leading gains, each with a more than 1% rise.

The benchmark is on track to end the week marginally lower as the Strait of Hormuz, a key global oil shipping route, remained mostly shut.

Rising price pressures have pushed investors to price in a 25 basis point interest rate hike by the European Central Bank when it meets next week, LSEG-compiled data showed.

"The well telegraphed policy hike coming next week reveals a preference for curbing upside inflationary risks rather than addressing downside growth risks," said a group of macro analysts led by Rune Thyge Johansen at Danskebank.

"We expect (Christine) Lagarde to keep full optionality on the future policy ‌rate path, ⁠including a potential second summer hike."

Chip stocks eased, with Infineon Technologies (IFXGn.DE) and STMicroelectronics (STMPA.PA) down 4.8% and 5.7%, respectively, after U.S. chipmaker Broadcom (AVGO.O) reported lower-than-expected second-quarter revenue.

European tech stocks (.SX8P) have rallied the most on the STOXX index this quarter.

Markets kept an eye on the financial services sector (.SXFP), a day after signs of strain in private markets rattled stocks in Europe and the U.S.

Swiss asset manager Partners Group (PGHN.S) added 3.4%, ⁠steadying after a slump on Wednesday, when it said it expects a slowdown in fundraising in the second half of 2026 and into 2027.

British asset manager Premier Miton (PMIP.L) lost 6.7% after its first-half profit nearly halved from a year earlier.

Shares of Remy Cointreau (RCOP.PA) rose 11.3% after CEO Franck ⁠Marilly laid out a turnaround plan and said the beverage maker aimed to boost operating profit by around €100 million ($116.1 million) by 2028/29.

While earnings for European firms have fared better than expected in the first quarter, according to LSEG-compiled data, corporates could ⁠face the heat in the face of a prolonged Middle East conflict.

Pirelli (PIRC.MI) dipped 1.5% after U.S.-based short-seller Grizzly Research took a short position on it, though the Italian premium tyre maker denied the report.

Puma (PUMG.DE) shares gained 5% after Citigroup raised its rating to "buy" from "neutral".

Reporting by Utkarsh Hathi and Johann M Cherian in Bengaluru; Editing by Harikrishnan Nair

Reuters report

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