Europe open: Shares down on hawkish Fed talk; Oil falls after Iran deal

(Sharecast News) - European shares opened lower on Thursday as hawkish sentiment from the US Federal Reserve offset optimism over the signing of a peace deal between Iran and Washington. The pan-regional Stoxx 600 index was down 0.03% to 639 at 0825 BST, despite the central bank holding interest rates unchanged as expected.

US shares had closed lower overnight after new Fed chair Kevin Warsh held his first news conference and confirmed projections that interest-rate forecasts had been revised upwards for the next three years.

The so-called dot plot graph showed that nine of the Fed's 18 policymakers expecting at least one rate hike before the end of 2026 - though Warsh abstained from submitting a projection. Back in March, at the onset of the energy crisis caused by the Iran war, no Fed participants expected a hike.

Meanwhile, US President Donald Trump signed a 14-point peace agreement with Tehran, hailing it as a "major win" for his country despite making large political and financial concessions in order to get the vital Strait of Hormuz open again.

The deal includes an immediate lifting of a US naval blockade on Iranian ports and waivers for Iranian crude oil to be shipped abroad.

Oil prices fell further on the news, with Brent crude down 1.86% to $78 a barrel and West Texas Intermediate 2.19% to $75.

It also contained the potential lifting of all international sanctions against Tehran, the unfreezing of Iranian assets worth billion and plans to develop a $300bn reconstruction fund for Iran funded by regional partners in the Gulf.

However, Iran said it would in 60 days start charging fees for ships to pass through the strait - a situation that didn't exist before the US and Israel started their war of choice on Iran and Lebanon.

On the economics front, traders are looking towards and interest rate decision from the Bank of England with analysts expecting no change despite rising inflationary pressures.

In equity news, shares in Edenred surged on a report on French publication La Lettre that private equity fund BC Partners is considering taking control of the meal voucher provider.

BC Partners first wants to partner with a financial firm. Four funds have been approached, including the Canadian firm PSP Investments, to form a consortium, the report stated.

Reporting by Frank Prenesti for Sharecast.com