European shares recovered on Friday as oil prices eased on hopes of a pause in the Middle East conflict, while telecom stocks came under pressure following SpaceX’s deal to acquire a nationwide spectrum portfolio.
The pan-European STOXX 600 index rose 0.8% to 630.47 points by 0718 GMT, rebounding after closing at a near four-month low on Thursday as surging oil prices and bond yields weighed on investor sentiment.
Oil prices fell nearly 1% on Friday after US President Donald Trump said Washington would not attack Iran before next month's US elections. The remarks helped ease concerns about potential disruptions to Middle East oil supplies and the risk of persistently high energy prices fuelling inflation.
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Elevated oil prices have heightened concerns that major central banks could be forced to tighten monetary policy more aggressively, potentially weighing on economic growth and equity valuations.
Eurozone government bond yields also retreated after reaching multi-decade highs in recent sessions, as investors assessed the inflation outlook and mounting government debt burdens. The decline in yields provided additional support to European equities.
Most European sectors traded higher on Friday, although the telecom index fell 2.7%, making it the worst-performing sector.
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Deutsche Telekom shares dropped 7% after SpaceX struck a deal to acquire a nationwide low-band spectrum portfolio, raising the prospect of increased competition for established wireless operators in the United States.
Deutsche Telekom owns a 54% stake in T-Mobile US, whose shares fell 6% in after-hours trading. The development raised concerns about the competitive implications of SpaceX's move for traditional telecom operators.
Other European telecom stocks also declined, with Britain's Vodafone falling 3.5%, France's Orange losing 2.4% and Spain's Telefonica slipping 2.3%.
According to Reuters, the broader European market rebound reflected easing concerns over energy prices and bond yields, even as the SpaceX deal triggered a sharp selloff in telecom shares.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)
