America and Iran agreement.. The European Stoxx 600 index is at a record level economy

The European STOXX 600 index recorded a new record level at the beginning of trading on Monday, supported by an improvement in investors’ appetite for risk after the United States and Iran announced that they had reached an initial agreement that would end the conflict that has been ongoing for more than 3 months and open the Strait of Hormuz to shipping traffic.

The rise came in conjunction with a decline in oil prices, as Brent crude fell by about 4% after American and Iranian officials announced that they had reached a framework agreement scheduled to be signed on Friday.

The European STOXX 600 index rose 1.2% to 640.94 points by 07:11 GMT, exceeding the previous record level recorded on February 27, thus compensating for all its losses related to the conflict in the Middle East. The index fell slightly during trading.

Automotive company shares led sectoral gains, rising by 3.5%, while shares of airline companies most affected by energy prices, such as Lufthansa and Air France, jumped by more than 5% each. The travel and entertainment sector also recorded a new record high.

European stocks have lagged behind their counterparts in America and Asia since March, largely due to Europe’s reliance on the Strait of Hormuz to secure an important part of its oil imports, which has made its markets more sensitive to geopolitical tensions in the region.

Keep an eye on interest rates

Meanwhile, markets are still monitoring the path of European monetary policy after rising energy prices and inflationary fears prompted the European Central Bank to raise interest rates by 25 basis points last week.

According to data from the London Stock Exchange Group, traders expect the European Central Bank to raise interest rates by 25 basis points before the end of the year.

On the corporate level, Renault shares increased 5% after the automaker announced the development of a military vehicle in cooperation with Thales, a company specializing in defense technology.

The shares of Schneider Electric, which specializes in artificial intelligence equipment, also rose by 3.3% after concluding a strategic partnership with the Taiwanese company Foxconn to develop and expand the infrastructure for next-generation artificial intelligence data centers.

On the other hand, shares of energy companies fell by 2.7%, affected by the sharp decline in crude oil prices.