Europe's STOXX 600 rises after Trump postpones strikes on Iran power plants
London South East· 475 words · 3 min read
* STOXX reverses declines after Trump's comments
* Financials stocks lift the index
* Telecom Italia gains on Poste Italiane's acquisition offer
* Delivery Hero rises after Taiwan business sale to Grab Holdings (Updates throughout after Trump's comments on Iran's power facilities)
March 23 (Reuters) - European shares rose on Monday, reversing earlier losses after U.S. President Donald Trump said he would postpone any strikes on Iranian power plants and energy infrastructure following "productive conversations" with Tehran.
The pan-European STOXX 600 rose nearly 1% to 577.36 points, having fallen nearly 2.5% earlier in the session. However, Iran denying any communication with the U.S. and Israel continuing its strikes in parts of Tehran kept a lid on sentiment.
Regional bourses also recovered, with Frankfurt's DAX leading gains with a 1.4% rise. Banks that had fallen earlier in the session gained 2%.
Market mood was gloomy earlier in the session after Iran threatened to attack Israeli power plants and Gulf facilities supplying U.S. bases, in response to Trump's threat to "obliterate" Iran's power network.
Crude fell 7% after Trump's latest comments and weighed on shares of energy companies that lost 2%. An index tracking market volatility reversed gains and was marginally lower.
Energy price-sensitive airlines alsoreversed losses with Air France and Lufthansa climbing 1% each.
"This is the same type of thing that happened after Liberation Day," said Robert Pavlik, senior portfolio manager at Dakota Wealth, drawing a parallel to the volatile markets nearly a year ago as investors grappled with the lack of clarity on U.S. tariffs.
The continent is particularly vulnerable considering its dependency on imports via the Strait of Hormuz that acts as a conduit for one-fifth of the global oil trade.
Earlier in the session, the STOXX index was on track to confirm a correction, having fallen over 10% from its record high close in February.
Markets scaled back their bets on European Central Bank rate hikes after Trump's comments, which were two 25-basis-point rate hikes this year earlier on Monday, but brokerages have said the impact on inflation and economic growth could be drawn out for months.
Sovereign bond yields sharply reversed their rise.Yields on the German benchmark bund eased three bps from its highest level since June 2011.
Spain proposed fiscal measures to counter the economic impact of higher energy costs, bringing back the focus on elevated government debt.
Telecom Italia added 5.9% after postal service Poste Italiane announced it was launching a cash-and-share offer to buy the former phone monopoly for 10.8 billion euros ($12.5 billion). Poste Italiane declined 7%.
German company Delivery Hero advanced 7.3% after selling its food delivery business in Taiwan to Grab Holdings for $600 million.
Danish jeweller Pandora's shares jumped 10% on lower precious metal prices. (Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips, Nivedita Bhattacharjee and Sahal Muhammed)