Asia Pulls Back as European Markets Reach New Highs Amid Iran Deal Hopes

Markets in Asia experienced a slight pullback on Thursday following a tech sector decline, but European markets rebounded to new highs, driven by optimism over company earnings and a proposed deal between Iran and Oman.

The pan-European STOXX 600 index touched an all-time high, with media and telecoms stocks leading the charge. The London FTSE 100, France's CAC 40, and Germany's DAX also rose, with the latter up by just 0.1%. Hani Redha, multi-asset portfolio manager at MetLife, attributed the overnight losses to a natural correction in a market that was due for a rally.

Redha stated that strong earnings and renewed enthusiasm for AI-related tech stocks had pushed Wall Street to record highs, but he expects this pace of returns to slow. Despite the proposed deal between Iran and Oman, which could give Tehran control over ships entering the Gulf through the Strait of Hormuz, traders remained cautious.

Oil prices fell below $80 a barrel following the news, with Brent crude futures up 0.3% at $79.70 and US West Texas Intermediate futures up 0.2% at $75.37. Redha said that the market was becoming less sensitive to negative developments from the region.