European shares scale record peak on earnings, US-Iran optimism

By Tharuniyaa Lakshmi and Ragini Mathur

Aug ‌6 (Reuters) - European shares hit ​an intraday ​record high on Thursday as investors assessed the prospects of a U.S.-Iran peace deal and progress toward reopening the Strait of Hormuz, alongside a largely positive slate of corporate earnings.

The ‌pan-European STOXX 600 index was up 0.5% at 660.22 points, as of 0849 GMT. The ⁠benchmark index closed at an all-time high in the previous two sessions.

Resilient company results so far have helped European markets look past ‌geopolitical risks, with investors betting that ‌a potential de-escalation in the Middle East could further support risk appetite.

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 Tehran control over ships entering the Gulf through the Strait of Hormuz, one of the biggest concessions yet to Iran.

However, oil futures were up 0.5% on Thursday as reports of attacks ⁠on Saudi tankers in the Red Sea and Gulf of Aden renewed supply tensions.

"Markets have seen plenty of false dawns throughout this conflict, and ​while the detail is becoming more concrete, attention is now shifting from whether an agreement can be reached to what the final arrangements will look like, including unresolved ​questions around whether Iran will eventually be permitted to levy tolls ‌on vessels using the Strait," said Deutsche Bank analysts led by Jim Reid.

Corporate results drove much of the day's market action. Analysts have steadily raised profit forecasts through ⁠the reporting season, with second-quarter STOXX 600 earnings now expected to rise nearly 21%, according to LSEG data, up from expectations of about 12.5% in early May.

Shares of Deutsche Telekom rose 5.7% after the German telecom operator expanded its 2026 share ⁠buyback programme by €3 billion ($3.5 billion) to up to €5 billion. The regional telecom sector gained 2.1%.

Media stocks jumped 2.9% with WPP soaring 23.8%. ​The stock was poised for its biggest daily gain since 1992, after the advertising group beat organic growth estimates and chief executive Cindy Rose said it was on track with plans to stabilise the business.

Among other top STOXX 600 gainers, Renk ‌rose 5.5% after the defence firm reported a surge in second-quarter orders that beat analysts' estimates.

On the flip side, Rheinmetall edged down 0.8% after it lowered its 2026 ‌sales outlook. The aerospace and defence sector was up 0.5%.

Elsewhere, Hikma Pharmaceuticals climbed 9.5% after posting a 9% increase in ⁠half-year core operating profit and maintaining its ‌annual outlook.

The STOXX 600 technology sector ​was down 0.3%, tracking a pullback in U.S. and Asian tech stocks following a recent AI-driven rally.

(Reporting by Tharuniyaa Lakshmi and Ragini Mathur in Benglauru; Editing by Sherry Jacob-Phillips and ‌Vijay Kishore)

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