European stocks end steady as gains in autos, chemicals offset Iran war uncertainty

• Reuters

• Published On May 28, 2026 at 07:33 PM IST

Autos and parts gained on strong car registration data, while chemicals were boosted by AkzoNobel’s takeover rejection.

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European shares ended little changed on Wednesday, holding near record levels reached before the Iran war began, as gains in automobile and chemical stocks offset lingering concerns over the conflict and its potential impact on energy markets. The pan-European STOXX 600 index closed up 0.03 per cent at 628.18 points after trading ‌modestly higher earlier ⁠in the session ⁠and about 1 per cent below its all-time high touched before the conflict began in late February.

Markets took some comfort from a pullback in oil prices, with Brent crude down 3.2 per cent, even as investors continued to track mixed signals from Washington and Tehran. Iran’s state TV said it had obtained a draft of an unofficial framework for an initial understanding between the United States and Iran to end the conflict. It said it included a provision for Tehran to restore shipments through the Strait of Hormuz to pre-war levels within a month, but ⁠the White ‌House dismissed the report as false.

On Tuesday, Iran accused the US of violating a ceasefire, raising fresh doubts over the durability of peace efforts.

“Europe is more exposed than the US to ⁠the economic transmission channel of the conflict, which is obviously related to energy,” Luca Bindelli, head of investment strategy at Lombard Odier, said.

“If we were to reach a deal, some of these concerns building around Europe would probably unwind,” Bindelli said.

“We would not necessarily see the earnings picture improve materially in the immediate aftermath, but from a sentiment and multiples perspective, Europe could rebound.”

A rise in energy prices has been a key reason European equities underperformed Wall Street this year, according to analysts. The European Central Bank also warned on Wednesday that the war and lingering trade tensions could ‌hurt euro zone growth, raise borrowing costs and strain some member states’ public finances.

Autos and parts rose 2.5 per cent after data showed Europe’s car registrations rose 7 per cent in April, supported by demand for electrified vehicles. Chemicals climbed more than 1.3 per cent, ⁠helped by a 19.5 per cent jump in AkzoNobel after the Dulux paint maker rejected a joint cash takeover offer of 73 euros ($85) per share from Nippon Paint and Sherwin-Williams.

Naturgy fell 4 per cent after private equity firm CVC Capital Partners sold its entire 13.8 per cent stake in the Spanish energy company at a discount. Clean energy stocks were also under pressure, with Nordex down 3 per cent, while Orsted and Vestas lost 3.1 per cent and 7.4 per cent, respectively. Polish video game developer CD Projekt dropped 7.5 per cent after it said it would release a third story expansion for its flagship game, “The Witcher 3: Wild Hunt,” in 2027 rather than this year as the market had anticipated.