Renewed hopes for a swift end to the US-Iran conflict are fueling a bullish sentiment across equity markets. By midday Wednesday, the Dax was trading approximately 2.5 percent higher at 25,002 points, reclaiming the psychologically significant 25,000 level for the first time since the onset of the Iran war. The EuroStoxx50 also gained around 2.5 percent to reach 6,008 points, while futures for major US indices pointed to a positive open. 'The Dax is likely to benefit particularly from the prospects of potentially falling energy prices,' said Andreas Lipkow, chief analyst at broker CMC Markets. Brent North Sea crude and US light crude WTI extended their losses, with prices recently down roughly 8.5 and 9.5 percent at 100.89 and 92.84 dollars per barrel (159 liters) respectively.

According to Pakistani mediation circles, the USA and Iran are on the verge of an agreement to end the war. A letter of intent could be finalized very soon, says a Pakistani insider close to the negotiations. 'We are almost there,' the source added, referring to a one-page memorandum. This confirms a report by the US news portal Axios. Official statements from Washington or Tehran are not yet available. US President Donald Trump had previously spoken of significant progress and held out the prospect of a temporary suspension of US escort operations for commercial vessels in the Strait of Hormuz.

GOLD PRICES SOAR

Investors also flocked to gold, with the precious metal appreciating by more than three percent. 'A peace agreement that allows for the normalization of shipping through the Strait of Hormuz would reduce inflationary pressure and enable the US Federal Reserve to cut interest rates in 2026,' explained ActivTrades analyst Ricardo Evangelista. Lower interest rates boost demand for non-yielding gold, thereby supporting its price.

In such a scenario, the dollar and bond yields would also be expected to fall. Such a backdrop could allow the precious metal to rise above 5,000 dollars and approach the 5,500 dollar mark by year-end, Evangelista said. A weaker US currency makes dollar-denominated commodities cheaper, further supporting demand. The dollar index was down about half a percent at 97.850 points by midday Wednesday, its lowest level since early March.

EARNINGS FLOOD PROVIDES ADDITIONAL MOMENTUM

Regarding individual stocks, investors reacted predominantly positively to a series of newly released financial results. Companies such as Continental, BMW, HelloFresh, Rational, Lufthansa, and Symrise saw gains ranging from one to nearly eight percent following their reports.

On the Copenhagen Stock Exchange, Novo Nordisk caused a stir with a six percent jump. The Danish pharmaceutical group is more optimistic about the full year thanks to a strong sales launch of its new weight-loss pill.

In London, spirits group Diageo impressed investors with its figures, lifting the shares by a good five percent. Conversely, financial reports from information service provider Wolters Kluwer and food retailer Ahold Delhaize led to disappointment, with the stocks losing six and 3.5 percent respectively in Amsterdam.

Meanwhile, Fresenius, Renk, and Hensoldt slipped by one to 1.5 percent. Some stocks, including Infineon, Daimler Truck, Zalando, and Redcare Pharmacy, were searching for direction following the publication of their results.

(Report by Sanne Schimanski. Edited by Olaf Brenner. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)