European shares opened higher on Wednesday, lifted by growing optimism over fresh diplomatic efforts to secure a ceasefire in the Ukraine conflict, even as crude oil prices weakened on expectations of reduced geopolitical risk.
The pan-European Stoxx 600 was up 0.6 percent in early trading, led by gains in the banking, travel and industrial sectors. Germany’s DAX climbed 0.7 percent, France’s CAC 40 rose 0.5 percent and London’s FTSE 100 was up 0.4 percent, reflecting broad-based investor confidence across major bourses.
Sentiment was buoyed by reports of renewed peace negotiations in Geneva, supported by US and EU diplomats, aimed at ending hostilities between Russian and Ukrainian forces.
Analysts said even small signs of progress in talks helped ease fears of a deeper energy shock in Europe, where the conflict has disrupted key natural gas and oil supplies since 2022.
As risk appetite improved, traditional safe-havens such as gold dipped slightly, while government bond yields edged higher.
Energy stocks underperformed the wider market after Brent crude slipped below $78 per barrel for the first time in two weeks amid hopes that a negotiated settlement could eventually reduce supply disruptions across global oil markets.
Oil majors BP, Shell and TotalEnergies lost between 0.5 percent and 1 percent in early deals, although the broader energy sector remained stable due to strength in refining margins.
Technology, financials and travel stocks led the advance, with Airbus, Deutsche Bank and TUI among the top gainers.
Traders are also awaiting comments from US Federal Reserve Chair Jerome Powell at the upcoming Jackson Hole symposium, which could offer clues on interest rate trajectories amid persistent inflation across developed markets.
With market attention split between geopolitical developments and monetary policy outlook, analysts see room for cautious upside if peace negotiations in Ukraine make meaningful progress.
Written By Ian Maleve
