Europe open: Shares rally as Iran-Israel ceasefire holds

(Sharecast News) - European shares rallied on Thursday as the Israel-Iran ceasefire seemed to be holding while investors also assessed commitments by Nato member countries to lift defence spending to 5% of GDP. The pan-regional Stoxx 600 index was up 0.27% to 538.42 in early deals after closing in the red in the previous session on fears the fragile peace between the two sworn enemies might not hold.

"A sense of calm has descended on markets this morning as high-stakes drama on the global stage took the night off," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

"US markets took a pause yesterday as investors digested recent gains, and low trading volume sapped momentum. Futures suggest a positive open later today, though, as the S&P 500 moves ever closer to fresh all-time highs.

"Easing tensions in the Middle East, the potential for rate cuts coming later this year, and stabilising oil prices are helping support a relatively positive outlook for equities despite all the background noise."

In equity news, shares in H&M jumped after the Swedish fashion retailer reported a slightly stronger second-quarter profit.

Reporting by Frank Prenesti for Sharecast.com