LIVE MARKETS-Trump's latest u-turn lifts stocks, Iran say not so fast

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TRUMP'S LATEST U-TURN LIFTS STOCKS, IRAN SAYS NOT SO FAST

European shares rallied hard after U.S. President Donald Trump said he was backing down from targeting Iran's power network, saying they have held "constructive" talks.

While Trump's comments caused a sharp reversal, Iran's FARS news agency, citing a source, says there is no direct communication with the U.S., nor through intermediaries.

The STOXX 600 .STOXX, which had been down 2.3%, is now up just 0.5%, although it had been up as much as 1.8% immediately after Trump's comments. Other major European indexes also jumped sharply after being down heavily earlier in the morning.

Unsurprisingly, energy stocks .SXEP are reversing some of their recent gains, as oil prices have slumped. Brent crude futures LCOc1 dropped about $16 per barrel in the aftermath of Trump's comments but have bounced slightly to trade around $101 per barrel. Tasnim, citing a source, said the Strait of Hormuz would not return to pre-war conditions as long as the "psychological warfare continues".

Sectors that have been hit hard since the start of the war - travel & leisure .SXTP, luxury .STXLUXP, banks .SX7P and tech .SX8P - are the biggest early beneficiaries.

(Samuel Indyk)

FOR MONDAY'S OTHER LIVE MARKETS POSTS:

EUROPEAN EARNINGS GROWTH WIPED OUT IN ECB ADVERSE SCENARIO CLICK HERE

EUROPEAN SCREENS FLASH RED, CORRECTION IN SIGHT CLICK HERE

OF COURSE TRUMP WOULD HAVE A COUNTDOWN CLICK HERE

EUROPE BEFORE THE BELL: FUTURES SINK CLICK HERE