Iran announced a two-week ceasefire allowing safe passage through the Strait of Hormuz, triggering a market rebound where airline stocks surged while energy giants plunged.

Air France-KLM jumped 12.6 per cent and Lufthansa rose 11.9 per cent as the sector, battered by travel disruptions, rebounded. Banks also rose on reduced inflation fears, with Société Générale up 8.5 per cent and Barclays gaining 8 per cent. Energy stocks, however, fell sharply: Shell dropped over 8 per cent, BP fell more than 8 per cent, and Norway's Equinor plunged 12.9 per cent as oil prices tumbled.

The ceasefire offers temporary relief for global shipping but leaves broader conflict risks unresolved, with investors now pricing in near-term stability while watching for longer-term supply chain impacts.