European shares extend run of record highs on earnings, US-Iran optimism
Published Fri, Aug 7, 2026 · 05:54 AM
EUROPEAN shares closed at a record high for a third straight session on Thursday (Aug 6) as investors assessed prospects for a US-Iran peace deal and progress toward reopening the Strait of Hormuz, while digesting a largely positive slate of corporate earnings.
The pan-European Stoxx 600 index closed 0.2 per cent higher at 658.19 points, having risen as far as 660.91 during the trading session.
The major stock indexes in Spain, France and Italy also all closed at record levels.
Resilient company results are helping European markets look past geopolitical risks, with investors betting that a potential Middle East de-escalation could further support risk appetite.
“We haven’t even got a peace deal in Iran …. yet people aren’t even waiting for this deal to happen. They’re already lifting equity markets to all-time highs,” said Michael Field, chief equity market strategist at Morningstar.
A senior Iranian source and two regional officials told Reuters that a proposed deal between Iran and Oman to help end five months of war would give Teheran control over ships entering the Gulf through the Strait of Hormuz, one of the biggest concessions yet to Iran.
Earnings season in full swing
Corporate results drove much of the day’s gains. Analysts have steadily lifted profit forecasts through the reporting season, with second-quarter Stoxx 600 earnings now expected to rise nearly 21 per cent, according to LSEG data, up from expectations of about 12.5 per cent in early May.
“Earnings certainly are a boost, but the robustness of the economy is giving a boost to investor sentiment and encouraging people to put money into equity markets,” Field said, pointing to recent euro zone growth data that showed the bloc’s economy remained resilient despite the weakness linked to higher energy costs triggered by the Iran war.
Shares of Deutsche Telekom rose 6.3 per cent after the German telecom operator expanded its 2026 share buyback programme by 3 billion euros (US$3.5 billion) to up to 5 billion euros.
The regional telecom sector gained 2.9 per cent. Media stocks were up 3 per cent with WPP jumping 28.6 per cent, its biggest daily gain since 1992, after the advertising group beat organic growth estimates and chief executive Cindy Rose said its plans to stabilise the business were on track.
Renk rose 5.8 per cent after the defence firm reported a surge in second-quarter orders that beat analysts’ estimates.
Rheinmetall fell 3.5 per cent after it lowered its 2026 sales outlook. The broader aerospace and defence sector fell 0.8 per cent. Siemens closed 4.5 per cent lower as results in the firm’s digital industries division missed expectations, despite the German industrial group reporting its highest-ever quarterly industrial profit and raising its full-year guidance.
Hikma Pharmaceuticals rose 8.2 per cent after posting a 9 per cent increase in half-year core operating profit and maintaining its annual outlook. REUTERS
