Europe close: Stocks mixed as oil prices ease

(Sharecast News) - European stocks closed mixed on Friday as investors grew more hopeful that the US and Iran could reach an agreement to extend their fragile ceasefire and begin talks on Tehran's nuclear programme.

The pan-European Stoxx 600 rose 0.22% to 626.48.

Germany's DAX edged up 0.08% to 25,113.06, while France's CAC 40 slipped 0.07% to 8,183.34 and London's FTSE 100 fell 0.16% to 10,409.28.

Oil prices declined, with Brent crude futures last down 1.89% on ICE at $91.94 per barrel, and the NYMEX quote for West Texas Intermediate 1.63% lower at $87.45.

Axel Rudolph, chief technical analyst at IG, said: "US equity indices extended their gains with the Dow also hitting a new record as investors made the most of the AI-driven rally alongside falling oil prices.

"Both Brent and WTI - trading in the $90 per barrel region - are set for a monthly drop amid hopes of the Strait of Hormuz re-opening in early June.

"In Europe inflation data for its two largest economies came in lower-than-expected but remains well above the ECB's target."

Axios reported late on Thursday that the US and Iran had reached an agreement on a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran's nuclear programme.

Citing two US officials and a regional source involved in mediation efforts, the report said president Donald Trump had yet to give final approval, while Iran had also not confirmed its acceptance.

Speaking to reporters at Joint Base Andrews, vice-president JD Vance said the US was "very close" to finalising an agreement with Iran, although some issues remained, including "the highly enriched stockpile and also the question of enrichment".

Kathleen Brooks, research director at XTB, said: "We reach another weekend with still no formal agreement between Iran and the US to end the war in the Middle East and reopen the Strait of Hormuz.

"The prospect of a resolution has been dangled all week, but according to the US vice president, there are still several sticking points to work out before an agreement can be reached.

"This has not stopped markets from anticipating a deal will be struck," she added.

"US stocks made fresh record highs on Thursday, and stock indices across Europe and Asia are also set to post gains this week, as volatility falls."

Brooks said Asian equities had outperformed their European and US peers in the final trading week of May, with Japan's Nikkei and South Korea's Kospi both rising more than 7%, compared with a 2% gain for the S&P 500 and almost 3% for the Nasdaq.

"The FTSE 100 is an outlier, it is barely eking out a weekly gain, as it absorbs the decline in BP's share price caused by the abrupt resignation of its chairman, and a decline in commodity prices which are also hurting the UK's oil majors and miners," she said.

Inflation eases in Germany in May

On the economic front, German inflation eased in May despite the ongoing Middle East conflict.

Destatis said consumer price inflation fell to 2.6% from 2.9% in April, while harmonised inflation eased to 2.7% from 2.9%, below expectations for 2.8%.

Core inflation, excluding food and energy, rose to 2.5% from 2.3%.

Energy prices increased 6.6% year-on-year, down from 10.1% in April.

Carsten Brzeski, global head of macro at ING, said lower energy prices were the most notable move and were partly explained by the government's temporary tax rebate on fuel and diesel.

He said the figures should not be read as evidence that the inflation wave was already over, but rather as confirmation that it was "a relatively mild inflation wave".

In the US, the goods trade deficit narrowed to $82.4bn in April from $85.3bn in March, better than expectations for $86.5bn.

Exports rose 4% to a record $219.7bn, driven by capital goods, industrial supplies and consumer goods, while imports increased 1.9% to $302.1bn.

Ocato, CTS Eventim both in the green

In equity markets, Ocado surged 12.25% after agreeing a partnership with Asda to develop the supermarket group's online business across the UK using the Ocado Smart Platform.

The companies said the focus would be on replacing and upgrading Asda's ecommerce infrastructure, with Ocado's solutions to be rolled out across stores and dark stores from 2027.

CTS Eventim jumped 10.69% after the German ticketing company reported well-received first-quarter results.

Reporting by Josh White for Sharecast.com.