European equities rose 0.3% at the open on Thursday, slightly extending the previous sessions gains of 1.4% as traders adopted a wait-and-see approach on the impact of energy supply disruptions due to the war between the US, Israel and Iran.
“Effectively what we are seeing, after days of falls, is a pause and rethink by investors,” Morningstar’s chief European markets strategist Michael Field says.
The conflict, now in its sixth day, has brought tanker traffic through the crucial Strait of Hormuz to a near standstill despite US efforts to assist maritime traffic through escorts and insurance guarantees. Brent crude oil resumed gains to USD 84, while the TTF natural gas price extended gains to a one-year high of EUR 52 per MWh.
On Wednesday, Reuters reported that Qatar’s LNG facility, the origin of nearly 20% of global supplies, will be fully shut down.
This would rule out a restart within a few days, Morningstar analyst Adam Baker says. ”It will now take weeks from the decision to restart, but no major damage has been reported either.”
Asian stocks rebounded by nearly 11% from the prior session’s steep selloff, with Korean stocks recouping most of their losses after marking their worst one-day performance since 2008. On Thursday, the South Korean government announced a market stabilization package worth about USD 68 billion, driving the rebound.
“Korean market moves are mind-blowing, and the amplitude alone signals that things are not going well,” Ipek Ozkardeskaya, senior analyst at Swissquote, says. “Price action therefore remains extremely jittery, and large gains are themselves signs of extreme volatility.”
The major oil-importing nation had been hit hard by concerns over energy prices amid the virtual closure of key transit route the Strait of Hormuz. The critical maritime route accounts for 31% of the world’s seaborne crude exports, according to market intelligence firm Kpler.
The region’s broader Morningstar Asia Index closed 2.6% higher in dollar terms. US stock futures pointed to a neutral open.
Those concerns appeared to abate later Wednesday after the Trump administration said the US would provide risk insurance and possible naval convoys to help resume trade through the route. White House spokesperson Karoline Levitt said more details were due in the coming days.
Earnings Season Doesn’t Stop for a War- and Drives Individual Stock Performance
As the impact of the Iran War was being digested, year-end earnings were driving some of the region’s top- and bottom performers. Britain’s Rentokil RTO jumped 12% after earnings beat expectations, and drinks maker Campari CPR rose 8% after announcing surprisingly optimistic guidance for 2026.
Italian communications technology firm and earstwhile pandemic winner Nexi NEXI slumped as much as 20% after earnings missed expectations, reaching a new all-time low. Hearing aids maker Amplifon AMP fell 11% after meeting its sales targets but releasing guidance that “lacks detail and visibility into mergers and acquisitions, reducing our confidence in the pace of recovery,” according to Morningstar analyst Max Jousma.
