Stock prices rise after US-Iran ceasefire

There is optimism in the markets following the hopeful bilateral ceasefire between the governments of the United States and Iran. The agreement was reached on Wednesday morning. It is an agreement for the next two weeks. It is based on open negotiations for a “final” and “long-term” peace agreement. During this period, “safe passage” through the Strait of Hormuz is also guaranteed.

Given this encouraging outlook, the markets did not take long to react. The value of shares in major European listed companies skyrocketed. This increase in value can be observed almost continuously throughout the day. The only exception is energy companies. They are trading in the red due to a loss in the value of their shares. This is in the context of falling oil and gas prices, which are a consequence of the “guarantees” for the opening of the Strait of Hormuz.

In the fashion industry, the development is completely opposite to that of March 2nd. This day followed attacks on Iran by the armies of the United States and Israel on February 28th. Overall, the major European listed fashion companies are experiencing a very positive trading day. The market’s optimism about the industry is far greater than the fears after that last Saturday in February.

The price gains are significantly higher than the losses at the time. At that time, several days followed with losses in the value of the shares of the major European fashion companies. The industry was affected by the recent crisis in the Middle East in three ways: firstly, an interruption in the value chains led to delivery delays, secondly, the costs of imports and production processes increased and thirdly, a decline in consumption was already noticeable among consumers due to the uncertainty.

European fashion on the stock market in positive territory

Now that a large part of these uncertainties have been resolved, the stock market development of the major European fashion companies is more than positive. This was already evident at the opening of the trading session on Wednesday morning. Shares of major fashion companies soared following the confirmation of the two-week ceasefire between the United States and Iran, negotiations for a long-term peace deal and the opening of the Strait of Hormuz. The increases in value ranged between plus 2.71 and plus 8.22 percent.

At the ends of this spectrum, when the stock market opened this morning, British group Burberry (up 8.22 percent) was at the top and Swedish fashion giant H&M Group (up 2.71 percent) at the bottom. From then on, the companies developed differently. Burberry shares have lost some steam and are currently trading at 1,143 pence, compared to last Tuesday’s closing price of 1,069.80 (up 6.84 percent). H&M shares, on the other hand, received a boost and are now trading at 176.75 Swedish krona, up from 171.25 at the close of the previous session (up 3.21 percent).

Other current developments: The shares of the French multinational group LVMH are currently trading at 500.70 euros (plus 7.25 percent), those of Kering at 275 euros (plus 6.69 percent) and those of Hermès at 1,781 euros (plus eight percent). As for the two major Spanish listed companies, the shares of Inditex, the owner of Zara and other chains such as Bershka, Stradivarius and Massimo Dutti, are currently trading at 53.18 euros (up 5.97 percent).