BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks closed higher on Wednesday as hopes of a potential U.S.-Iran peace deal helped offset concerns about economic growth and prompted investors to indulge in some buying. Data showing a bigger than expected drop in UK inflation contributed as well to the positive sentiment.
U.S. President Donald Trump claimed on Tuesday that the U.S. war with Iran will end 'very quickly.'
'We're going to end that war very quickly,' Trump told lawmakers gathered at the White House for the annual congressional picnic. 'They want to make a deal so badly. It's going to happen, and it's going to happen fast. And you're going to see oil prices plummet.
US Vice President JD Vance said both sides had already made 'a lot of progress' in negotiations, although he added that Iran's exact negotiating position remained unclear.
The pan European Stoxx 600 climbed 1.46%. The UK's FTSE 100 gained 0.99%, Germany's DAX settled with a gain of 1.38% and France's CAC 40 jumped 1.7%. Switzerland's SMI ended 0.26% up.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Poland, Portugal, Spain and Sweden closed with sharp to moderate gains.
Iceland and Russia closed weak, while Norway and Türkiye ended flat.
In the UK market, Marks & Spencer surged 6.7% after reporting a rebound in second-half profits.
Babcock International, Rolls-Royce Holdings, Antofagasta, IAG, Melrose Industries, St. James's Place, Fresnillo and Weir Group gained 4%-5.3%.
Shares of water utility Severn Trent gained after upgrading its adjusted earnings forecast for 2026 after reporting robust financial results for the second half of the year.
Lloyds Banking Group, Barclays, IG Group Holdings, Land Securities Group, ICG, Polar Capital Technology Trust, Persimmon and Barratt Redrow also moved up sharply.
Experian shed nearly 3%. The credit and data analytics firm slid despite reporting record annual results and announcing a fresh $1 billion share buyback program.
Centrica, Relx, Games Workshop, AutoTrader Group, The Sage Group, 3i Group, Reckitt Benckiser, Smith & Nephew, Shell and BP ended notably lower.
In the German market, Infineon climbed more than 5%. MTU Aero Engines, Deutsche Bank, Siemens Energy, Heidelberg Materials, Siemens, Commerzbank, Zalando, Vonovia, Deutsche Post and Merck gained 2%-4.5%.
BASF, SAP, Scout24 and Brenntag ended lower by 1.6%-2.3%.
In the French market, STMicroelectronics climbed 6.7%. ArcelorMittal, Societe Generale, Legrand, Accor, Schneider Electric, Safran, Kering, LVMH, Airbus, Saint-Gobain, BNP Paribas and Sanofi gained 2%-5%.
Capgemini ended more than 3% down, and Edenred slid 2.4%. Renault closed lower by about 1%.
On the trade front, the European Union has reached a provisional agreement to remove import duties on U.S. goods, keeping the bloc on track to meet Trump's July 4 deadline and avoid higher tariffs on European goods.
Data from Destatis showed Germany's producer prices increased at the strongest pace in nearly three years in April, rising by 1.7% year-on-year, reversing a 0.2% fall in March. The annual increase also surpassed economists' forecast of 1.5%.
On a monthly basis, producer prices grew 1.2% in April but weaker than forecast of 2%.
Final data from Eurostat showed Eurozone inflation accelerated in April, as initially estimated, driven by higher energy prices. The harmonized index of consumer prices posted an annual increase of 3% in April, up from 2.6% in March. The rate matched the estimate published on April 30.
Meanwhile, core inflation that excludes prices of energy, food, alcohol and tobacco, softened to 2.2% in April, as estimated, from 2.3% in the previous month.
Among main components of HICP, energy registered the biggest annual growth of 10.8%. This was followed by the 3% rise in services costs. Food, alcohol and tobacco prices rose 2.4% and non-energy industrial goods prices gained 0.8%.
On a monthly basis, the HICP climbed 1.0% in April, in line with flash estimate.
U.K. consumer price inflation slowed to 2.8% in April from 3.3% in March, reflecting the fall in energy bills and reduced costs for package holidays, according to data from the Office for National Statistics.
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