European Stocks Rebound as Oil Prices Fall, Truce Hopes Rise

European stocks are poised to end their three-week losing streak as oil prices retreat. The pan-European STOXX 600 index rose 0.6% to 640.43 points by 0821 GMT, putting it on track for a nearly 1% weekly gain.

The previous three weeks saw the index lose around 3%. Oil prices fell as hopes of a truce in the Middle East outweighed Houthi attacks on Saudi Arabia. Negotiators are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, sources close to the talks said.

Energy shares were the biggest sectoral losers, falling 0.7%. However, airline stocks advanced, with Ryanair and Lufthansa gaining more than 2% each. The travel and leisure index rose 1.2%, while basic resource shares gained 1.14%

The euro zone government bond yields are on track for their seventh consecutive weekly rise as crude prices remain near $100 a barrel and increasingly hawkish signals from central banks push up expectations for policy rates.