In Asia, the absence of negative surprises allowed markets to focus on further bidding up tech stocks with the greatest exposure to artificial intelligence, particularly in Japan, South Korea, and Taiwan.
SK Hynix, one of the region's major industry benchmarks, is on the verge of reaching a market capitalization of one trillion dollars, which would make it the second South Korean company to achieve this milestone after Samsung. Its shares have gained more than 200% so far this year.
On the geopolitical front, the Trump-Xi summit in Beijing proceeded without major shocks on its first day. Trump described the Chinese leader as a 'great leader and friend', while Xi stated that trade talks were progressing, though he warned that disagreements over Taiwan could lead the bilateral relationship down a dangerous path.
Analysts at Renta 4 noted that 'the focus of interest [of the summit] will be on whether there are concrete positive agreements (a joint statement on Hormuz or a Chinese commitment to pressure Iran, a renewal of the trade truce, and a de-escalation in semiconductors and rare earths) or, conversely, if differences between the world's two largest powers intensify'.
The meeting between Trump and Xi is also expected to address the war against Iran, amid a stalemate in peace negotiations that has pushed energy prices higher and forced governments to adopt relief measures for consumers.
The blockade of the Strait of Hormuz resulting from the military conflict is fueling fears of an inflationary spike that could force central banks to tighten monetary policy.
In this context, Philip Lane, Chief Economist of the ECB, warned on Thursday that the global oil crisis caused by the war in Iran could force the European Central Bank to raise interest rates to prevent rising energy costs from spilling over into wages, expectations, and general prices.
Brent crude was trading slightly higher at 105.89 dollars per barrel, well above pre-conflict levels.
Against this backdrop, at 0702 GMT on Thursday, Spain's blue-chip IBEX 35 was up 126.10 points, or 0.71%, at 17,781.00 points, while the FTSE Eurofirst 300 index of leading European shares advanced 0.43%.
In the banking sector, Santander rose 0.33%, BBVA gained 0.83%, Caixabank advanced 0.61%, Sabadell climbed 0.94%, Bankinter added 0.81%, and Unicaja Banco rose 0.81%.
Among large-cap non-financial stocks, Telefónica surged 5.37%, Inditex advanced 0.88%, Iberdrola gained 0.43%, Cellnex rose 0.96%, and oil major Repsol shed 0.31%.
(Reporting by Tomás Cobos; editing by María Bayarri Cárdenas)
