European shares pause as markets watch Mideast peace prospects; earnings on tap

European shares were steady on Thursday, after a sharp rally in the previous session, with investors holding on to optimism that a U.S.-Iran peace deal was close, while parsing through corporate results.

The pan-European STOXX 600 was muted at 623.56 points, as of 0703 GMT. Major regional bourses were mixed, with Germany's DAX flat and London's FTSE 100 down 0.2%.

The European index gained 2% on Wednesday, leaving it about 2% away from pre-war levels.

The energy-dependent region has lagged its global peers, which have rallied to record highs on artificial intelligence-led optimism, since the onset of the war.

U.S. President Donald Trump predicted a swift end to the war as Tehran considered a U.S. peace proposal that is expected to end the conflict while leaving Iran's nuclear programme and the reopening of the Strait of Hormuz unresolved.

Oil major Shell dipped 1.6% after it reported first-quarter profit that beat expectations, but reduced the pace of its quarterly share buyback programme. Peer BP was down 1.4%.

Persil maker Henkel soared 4.5% after the German firm met sales expectations for the first quarter.

Shares of Siemens Healthineers tumbled 5.7% after the medical tech company cut its full-year outlook due to structural change in the Chinese market and pronounced inflation expectations.

(Reporting by Twesha Dikshit; Editing by Harikrishnan Nair)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 7, 2026 at 12:19 AM.