European stocks close higher after U.S.-Iran ceasefire deal; travel stocks lead gains up 7%

European stocks soared on Wednesday, as global markets breathed a sigh of relief after the U.S. and Iran agreed to a conditional ceasefire deal.

The pan-European Stoxx 600 index finished the session 3.7% higher, with all sectors besides oil and gas in the green, and all major regional bourses closing in positive territory.

Travel and leisure stocks led the way, notching a 7.1% gain, as industrials added 6.6% and construction names rose 6.2%.

Antofagasta, Lufthansa, and Easyjet were among the biggest risers, each gaining around 10%.

Shell was the first of the energy majors to release earnings since the outbreak of the Iran conflict, reporting "significantly higher" oil trading profits on Wednesday.

Disruption from the war was felt in its LNG production, which fell from 948,000 barrels of oil equivalent in the fourth quarter of 2025 to 880,000-920,000 in the first three months of 2026.

"While the big increase in energy prices should boost Shell's profit, the company also has a significant operational footprint in the Middle East which has been disrupted by the fighting," said Dan Coatsworth, head of markets at AJ Bell.

"This dichotomy is reflected in Shell's latest update, with gas production hit by this disruption but refining margins and oil trading revenue seeing an uplift."

Shell's London-listed shares finished the session 4.7% lower.

Global markets rallied and oil prices plunged overnight after U.S. President Donald Trump said late on Tuesday that he had agreed to suspend planned attacks on Iranian infrastructure for two weeks.

The move was "subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz," he wrote on Truth Social.

Iranian Foreign Minister Abbas Araghchi said in a post on X on behalf of the country's Supreme National Security Council that Tehran's armed forces will "cease their defensive operations."