Europe: Shares trim losses on hopes of reopening of Strait of Hormuz

Published Fri, Apr 3, 2026 · 08:27 AM

[BENGALURU] Europe’s main stock index trimmed losses on renewed hopes of a reopening of the crucial Strait of Hormuz, even as US President Donald Trump’s promise to keep striking Iran kept sentiment in check.

The pan-European Stoxx 600 index dipped 0.2 per cent to 596.63 points on Thursday (Apr 2), after falling as much as 1.6 per cent earlier in the session.

Volumes were also low as European markets headed into a long holiday weekend. Norway and Denmark markets were closed on account of the Maundy Thursday holiday, while all major indices will be closed for Good Friday on Apr 3 and Easter Monday on Apr 6.

Iran was drafting a protocol with Oman to monitor traffic in the Strait of Hormuz, its foreign ministry said.

A potential reopening of the strait would resume shipping through the crucial waterway and help restore oil flows, easing inflation concerns.

Still, investors remained on edge after Trump vowed to hit Iran “extremely hard over the next two to three weeks”.

“We’ve said all along that the economic impact of this crisis depends not just on how high energy prices rise, but how long they stay elevated,” ING economists wrote.

European technology stocks slid 1 per cent, while miners fell 0.9 per cent. Banks fell 1.1 per cent and were among the major laggards on the index.

“For the first couple of weeks since the attacks, the market was very worried about inflation,” said Marija Veitmane, head of equity research at State Street.

“Now we begin to worry about growth outcomes… and that pressures equity multiples.”

This week’s whipsaw in markets also reflects the volatility investors have had to navigate for more than a month. The Stoxx volatility index added 1.5 points to 28.5.

“What began as a sharp shock to global energy markets is evolving into a more complex phase marked by shifting dynamics, heightened uncertainty and increasing risks of escalation,” Julius Baer analysts wrote.

Investors are still pricing in three 25-basis-point interest rate hikes by the end of this year, according to LSEG-compiled data. They had expected no change to monetary policy by the European Central Bank before the war.

Among individual movers, Stellantis added 4.1 per cent after Bloomberg News reported that the carmaker was discussing options for building electric vehicles in Canada with Chinese partner Zhejiang Leapmotor Technology. REUTERS