European Markets Open Mixed as Iran Deal Hopes Weigh on Oil

CNBC reported Tuesday that European stocks opened in mixed territory as traders digested a fast-moving geopolitical backdrop. London’s FTSE 100 edged up marginally while Germany’s DAX and France’s CAC 40 held flat. Italy’s FTSE MIB dipped slightly lower.

Oil Drops After Trump Delays Iran Strike

The dominant story moving markets was a late-Monday announcement from US President Donald Trump. He said via Truth Social that he had ordered military commanders to stand down from a planned strike on Iran. The move followed direct appeals from the leaders of Qatar, Saudi Arabia and the UAE. Trump stressed a deal would be reached barring Iran from developing nuclear weapons, but warned the military remains ready to act at any moment.

Oil prices slid sharply in response. Brent crude futures fell more than 2% to around $109.81 per barrel in early London trading. West Texas Intermediate dropped over 1% to approximately $107.44. The pullback offered modest relief to energy-importing economies already strained by months of elevated crude prices tied to the Iran conflict.

Background: Months of War Strain European Economies

The conflict with Iran has reshaped the European economic outlook since it escalated earlier this year. G7 finance ministers and central bankers wrapped up a two-day summit in Paris on Tuesday. Discussions centered heavily on managing the inflation and growth shock stemming from high energy costs. French Finance Minister Roland Lescure, who chaired the meeting, told CNBC on Monday that policymakers need a clearer picture of the damage before committing to coordinated responses.

Meanwhile, Russian President Vladimir Putin arrived in Beijing for a two-day summit with Chinese President Xi Jinping. The meeting, just days after Trump’s own visit to China, underscores the diplomatic tightrope Beijing is walking between Washington and Moscow.

Also Read: Trump Visits China Amid Deepening Trade and Security Tensions

UK Jobs Miss and Uniper IPO in Focus

Fresh UK labour data added to the cautious mood. The unemployment rate climbed to 5% in the three months through March, above the 4.9% reading in February and counter to economist forecasts for no change. Senior Indeed economist Jack Kennedy said the Iran war is expected to weigh on UK growth for several quarters, suppressing hiring. He noted a divided Bank of England Monetary Policy Committee may still consider a June rate hike given persistent inflationary pressure from energy prices, even as labour market risks mount.

In corporate news, Germany’s government announced plans to sell or list energy group Uniper, in which it holds a 99.12% stake. The state took control of the utility during the 2022 energy crisis at a cost of roughly 13.5 billion euros to taxpayers. Uniper CEO Michael Lewis said the company has rebuilt a strong balance sheet and is strategically well-positioned for a return to private ownership. The deal could rank among the largest European transactions of the year.

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