European stocks soar after Iran keeps Strait of Hormuz open; travel stocks gain 5%

European shares surged on Friday afternoon after Iran declared the Strait of Hormuz completely open to commercial traffic.

The pan-European Stoxx 600 closed up 1.6%, with all major bourses and most sectors finishing the session in positive territory.

The travel and leisure sector led the advance, ending the day about 4.7% higher.

Individual airline stocks soared, with easyJet shares closing almost 6.1% higher and Wizz Air surging 7.6%. London-listed shares of International Consolidated Airlines Group, which owns British Airways, Vueling and Aer Lingus among others, gained 6.2%. TUI, the Frankfurt-listed European travel and tourism mainstay, was up more than 5.4% by the closing bell.

German airline Lufthansa, which warned Thursday that it would immediately ground dozens of planes and cut flight capacity amid rising fuel prices, ended 5.6% higher, erasing morning losses.

Oil and gas stocks were the notable exception, ending 4.2% lower after news of the breakthrough sent oil prices into reverse. In London, BP shares slumped 7.4%, while Shell closed 5.6% lower. Norwegian energy major Vår Energi finished the day 6.2% lower.

Prices of Brent crude, the global oil benchmark, fell 10.6% to reach $88.85 a barrel, while in the U.S., West Texas Intermediate slipped 12% to $82.88 per barrel.