April 8 (Reuters) - European shares jumped more than 3% on Wednesday as a two-week Middle East ceasefire sparked a relief rally across global markets, raising hopes that oil and gas flows through the Strait
of Hormuz could soon resume.
The pan-European STOXX 600 index was up 3.6% at 611.73 points, as of 0713 GMT, and poised for its best session in a year, if current momentum persists.
Regional markets also mirrored the move, with Germany's DAX up 4.6%, while London's FTSE 100 climbed 2.3%.
Market reaction was swift after U.S. President Donald Trump agreed to a two-week ceasefire with Iran, less than two hours before his deadline for Tehran to reopen the Strait of Hormuz, where 20% of the world's oil transits, or face devastating attacks on its civilian infrastructure.
Beyond the immediate relief, investors are waiting to see whether the truce can pave the way for a lasting resolution.
Energy markets also responded swiftly, with Brent crude futures falling 15% below $100 a barrel, offering some respite after weeks of elevated oil prices. [O/R]
European equities have been under intense pressure since the U.S.-Israel military campaign against Iran erupted on February 28, with the continent's heavy dependence on oil imports through the largely blocked passage amplifying the pain.
Sectors linked to travel, industrials, and banking advanced between 5% and 7%, as they are typically seen as prime beneficiaries of lower energy costs and falling bond yields.
Meanwhile, energy sector lost 4.2% as crude prices tumbled.
Investors will turn their attention to euro zone retail sales and producer price data, due later in the day, which could provide further insight into the economic impact of recent energy market volatility.
(Reporting by Ragini Mathur in Bengaluru; Editing by Sherry Jacob-Phillips)
