-- German equities joined a global market rally, with the DAX climbing 5.06% by the end of Wednesday trade, on news of a two-week ceasefire agreement between the US and Iran.
The deal, which was secured just two hours before US President Donald Trump's ultimatum against Iran, centers on the reopening of the Strait of Hormuz under Iranian military oversight and a halt to US and Israeli strikes as negotiations proceed in Pakistan. German Chancellor Friedrich Merz said in a statement that they are in "close coordination" with the US and other partners to negotiate a "lasting end to the war."
Oil prices dropped on hopes that the flow of oil and gas through the vital waterway will resume. Danske Bank noted that the news sent Brent crude tumbling toward $92 per barrel of oil, though this price relief depends entirely on the reopening of the strait.
"For prices to stabilise at lower levels, oil and gas flows through the strait must pick up again, which remains uncertain. The deal looks fragile, particularly as Iran is allowed to charge fees on ships passing through," Danske Bank said. "The war is now in its sixth week, and scepticism remains about whether the ceasefire will hold, as many view it as a trust-building exercise. Significant uncertainties persist, and the oil market and broader markets are likely to stay volatile as they monitor activity from the Gulf."
Back in Europe, the contraction in the euro area's construction segment extended for the 47th straight month in March 2026, amid the sharpest downturn in new business since October 2025, due to energy and material inflation linked to the Middle East conflict. According to S&P Global, the S&P Global Eurozone Construction PMI Total Activity Index was down to 44.6 from 46 a month ago.
On the flip side, Germany's construction slump eased in March, with the downward trend in output slowing after the previous month was characterized by "particularly severe wintry conditions" that triggered "widespread disruption." Based on the latest S&P Global survey, the Construction PMI Total Activity rose to 48 from 43.7 in February, marking the highest reading in 2026 so far.
In corporate news, Heidelberg Materials (HEI.F) gained 9.57%, as BofA Global Research sees positive earnings momentum for the building materials company even as analysts project that "bad weather" in Europe and the US would affect its first-quarter results.
"Q1 typically accounts for c12-13% of FY EBITDA and c7-8% of FY EBIT for Heidelberg Materials due to seasonality, implying that a strong/weak first quarter typically has limited implications for FY estimates," BofA wrote. "Despite a weak start to the year, we remain confident that Heidelberg Materials can deliver on its FY-26 EBIT guidance of cEUR3.58bn at the mid-point (BofA forecast EUR3.7bn), reflecting normalised volume trends from March and a positive price/costs outlook. This will include energy surcharges implemented now to offset the recent spike in fuel and logistic costs."