Global Market: European shares hit record high as peace hopes, strong earnings lift sentiment

European stock markets climbed to fresh record highs on Thursday, supported by optimism over a potential U.S.-Iran peace agreement, easing concerns about global energy supplies, and another round of strong corporate earnings, according to Reuters.

The pan-European STOXX 600 index gained 0.4% to 660 in early trading after ending at record highs in each of the previous two sessions. Investor sentiment was buoyed by hopes that diplomatic efforts in the Middle East could reduce geopolitical tensions and improve stability in global markets.

According to Reuters, a senior Iranian source and two regional officials said a proposed agreement involving Iran and Oman could help bring an end to the five-month conflict. The proposal would reportedly grant Tehran control over ships entering the Gulf through the Strait of Hormuz, one of the world's most strategically important oil shipping routes.


Corporate Earnings Continue to Drive Markets
Corporate earnings remained the key driver for European equities as companies continued to report stronger-than-expected results.

Data compiled by LSEG showed that analysts have steadily upgraded earnings expectations during the reporting season. Second-quarter earnings for companies in the STOXX 600 index are now projected to grow nearly 21%, a significant improvement from the roughly 12.5% growth forecast at the beginning of May.

Deutsche Telekom Leads Telecom Gains
Among individual stocks, Deutsche Telekom surged 5.5% after announcing an expansion of its 2026 share buyback programme by €3 billion, taking the total planned repurchases to as much as €5 billion.

The announcement helped lift the broader European telecommunications sector, which advanced 1.6%.

Food Stocks Advance on Glanbia Results
The food and beverages sector also outperformed, rising 1%.

Irish nutrition company Glanbia jumped 8.4% after reporting a 7% year-on-year increase in first-half revenue, providing further support to the sector.

Technology Stocks Remain Resilient
European technology shares edged 0.1% higher despite weakness in global tech stocks following the recent artificial intelligence-driven rally. Investors largely brushed aside the pullback, maintaining confidence in the sector's longer-term growth prospects.

Focus Shifts to Euro Zone Retail Sales
Market participants will later monitor euro zone retail sales data for fresh insights into consumer spending trends and the health of the region's economy, with the figures expected to provide further direction for European markets.