Global markets hit records despite Iran conflict, says Euronext chief

Global stock markets are defying expectations, reaching record highs even as geopolitical tensions and inflation persist. Stéphane Boujnah, CEO of Euronext, the operator of stock exchanges in Amsterdam, Paris, and Milan, explains this surprising resilience. He notes that investors currently feel more optimistic than pessimistic, viewing the conflict around Iran as local and potentially reversible.

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You would perhaps expect that a war with an intensity like the one around Iran would have a stronger impact on the market, but that did not happen.

Boujnah points to strong corporate earnings in the first quarter as a key driver. He highlights significant AI investments and the overall positive performance of many listed companies. Investors anticipate a better-than-average economic situation regarding corporate results and price-to-earnings ratios once the conflict concludes.

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There is a feeling in the markets that this conflict is local and reversible.

He also clarifies a common misconception about stock market indices. Boujnah explains that owning a share in an AEX or CAC 40 company does not mean investing solely in the Dutch or French economy. Companies like ASML, for instance, derive only a small portion of their revenue from Europe. Their performance is influenced by global factors, not just local events like the war in Iran.

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The markets were impressed by the strong profits that many companies presented.