Europe midday: Shares soar, oil plunges as Iran hints Hormuz strait could open

(Sharecast News) - European shares powered ahead and oil prices plunged below $100 a barrel on Wednesday following a report that Iran suggested the Strait of Hormuz could reopen after US President Donald Trump paused an operation to protect ships in the waterway amid "great progress" on a on a peace deal.

The pan-regional Stoxx 600 index extended morning gains to be 2.55% higher at 625 by 1211 BST with all major continental bourses higher.

Iran's Islamic Revolutionary Guard Corps (IRGC) navy has announced the strait of Hormuz could reopen following the end of "threats from aggressors", the Reuters news service cited state media as saying.

The IRGC navy said the safe and stable transit through the key waterway could be possible. Trump said he was pausing his so-called 'Project Freedom' to protect ships traversing the vital strait in order to enable "complete and final agreement" with Tehran.

Crude oil prices fell sharply, with Brent crude down 10.68% to $98.30 a barrel.

"Trump announced "Project Freedom" on Sunday, a plan to guide ships through the blocked Strait of Hormuz. The risks became apparent almost immediately, with US and Iranian forces exchanging fire in the contested waterway and Iranian missiles intercepted over the UAE for the first time in weeks.," said Anna Macdonald, investment strategy director at Hargreaves Lansdown.

"(He) then paused Project Freedom on Tuesday evening, citing progress on a deal. Whether that progress is real or tactical is, as ever, unclear."

In equity news, airline, travel and related stocks rallied on peace hopes and the potential for lower jet fuel prices. Ryanair, easyJet, TUI, Rolls-Royce and MTU Aero were all up. Oil stocks fell in line with a weaker oil price with Equinor, VAR Energi, Aker BP, Repsol, TotalEnergies, ENI, BP and Shell all down between 4.6% and 10%.

Demant shares surged after Nordea raised its target price on the stock to 250 Danish kronor from DKK 240. Sydbank also upgraded to 'buy' from 'hold' on Tuesday.

Pandora shares sparkled as the Danish jeweller reported first quarter growth in line with expectations and confirmed full-year targets.

Novo Nordisk and BMW also gained after results.

Reporting by Frank Prenesti for Sharecast.com