Europe open: Stocks gain as investors eye Middle East developments
By Michele Maatouk
Date: Tuesday 05 May 2026
(Sharecast News) - European stocks were higher in early trade on Tuesday as investors continued to eye developments in the Middle East.
At 0920 BST, the benchmark Stoxx 600 index was up 0.4%, while Germany's DAX and France's CAC 40 were 0.7% and 0.4% higher, respectively. At the same time, Brent crude was down 0.9% at $113.36 a barrel.
Susannah Streeter, chief investment strategist at Wealth Club, said: "The Middle East situation is dominating, with the ceasefire looking increasingly fragile after an Iranian drone strike on the UAE's Fujairah oil facility and reports that two US ships entering the Strait of Hormuz were also attacked.
"Brent crude shot up to trade around $114 a barrel before easing slightly, as hopes for a significant resumption of oil shipments from the region are being dashed again. The fresh fracture in the region comes following President Trump's 'freedom' plan aimed at restoring shipping through the Strait of Hormuz.
"Shipowners and their insurers are set to stay super-cautious about vessels using the key waterway, given the risks of mines, small boat strikes, and potential drone attacks. However, the longer prices at the pumps stay elevated, hitting the wallets of millions of Americans amid looming mid-term elections, the more pressure will build on President Trump to find a resolution. But it's clear Iran is preparing to play hardball in negotiations, given its clear leverage over the Strait of Hormuz."
In corporate news, HSBC slid as it posted a surprise fall in quarterly earnings despite a spike in net interest income, after credit impairments rose at Europe's largest lender. The bank saw revenues rise by an above-forecast 6% in the first quarter to $18.6bn, with net interest income 8% stronger at $8.9bn and an 18% hike in fees in its wealth division, to $2.7bn.
However, pre-tax profits fell to $9.4bn from $9.5bn a year previously, missing forecasts for around $9.6bn, reflecting "higher expected credit losses and other credit impairment charges" in the quarter.
AB Inbev surged after the drinks maker's first-quarter sales and profits beat expectations.
Unicredit was also a high riser as it upgraded its full-year profit outlook and posted better-than-expected first-quarter earnings.
Geberit edged up as the Swiss plumbing materials supplier reported a dip in first-quarter sales that was in line with analysts' expectations.
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