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European equities closed at a more-than-three-month high on Wednesday, as investors priced in news that the U.S. is pulling out from the Iran nuclear accord. Stocks were also helped by a rally for energy stocks as oil prices advanced.
The pan-European Stoxx 600 ended 0.57 percent higher with most sectors and major bourses trading higher. That's the benchmark fourth consecutive win and its highest close since Feb. 1, according to FactSet data.
Oil and gas stocks were the top performing sector, up by more than 2.6 percent by the end of European trade. These were supported by news that the U.S. is withdrawing from the Iran deal. President Donald Trump announced his decision late Tuesday and added that sanctions on Iran would be restored. He hinted at an openness on the part of the U.S. to negotiations, and analysts said that was helping equity markets avoid a sizable selloff. Even so, the withdrawal puts Washington at odds with European allies.
Travel and leisure stocks dropped 1.1 percent on average. This was due to rising concerns over geopolitical issues, but also earnings. In particular, shares of Compass were down by almost five percent after the company announced some foreign exchange impacts on its latest set of results.
Airbus is talking with United Airlines about replacing its old 767 fleet, according to a Reuters report on Tuesday, and that could offset the impact the sanctions would have on the Airbus' deal with Iran, said Stallard. United is also talking to Boeing about replacing its aging 767 fleet, the report added.
Looking at luxury, Burberry fell over six percent. The British brand lost one of its shareholders — Albert Frere's Groupe Bruxelles Lambert sold its entire stake in the company.
