Europe open: Shares rally on hopes US will stay out of MEast crisis

(Sharecast News) - European shares rallied at the open on Friday after declines during the week as US President Donald Trump prevaricated on whether to join Israeli attacks on Iran. The pan-regional Stoxx 600 index was up 0.48% at 538 points. Germany's DAX rose 0.82% while Britain's FTSE 100 gained 0.36%.

Israel and Iran exchanged missile attacks overnight while European foreign ministers were holding talks with Iranian officials in Geneva in an attempt to reduce tensions. Trump meanwhile said any decision on potential US military attacks on Tehran would be made within two weeks.

"News that President Trump would delay any decision on joining Israel's attacks against Iran has boosted the market mood at the end of this week," said XTB research director Kathleen Brooks.

"Stock futures are higher and the oil price is tumbling, gold is down $25 per ounce. Brent crude has dropped by $2.30 per barrel so far, as traders price out the worst case scenario for geopolitics."

"The risk is that Trump changes his mind. However, like reciprocal tariffs, Trump sets movable deadlines. While the oil price is likely to maintain some geopolitical premium, Brent crude could move back below $75 per barrel, after touching $79 per barrel on Thursday, as fears of a major escalation in the conflict ease."

Travel stocks benefited from hopes of a de-escalation of Middle East tensions with TUI and Carnival both up.

UK housebuilder Berkeley slumped almost 9% despite posting slightly better than expected annual earnings and unveiling its new chief executive amid hopes that falling interest rates and government building targets would boost sales.

Reporting by Frank Prenesti for Sharecast.com