European stock markets closed mixed on wednesday as optimism over a possible agreement to reopen the strait of hormuz and strong corporate earnings offset lingering geopolitical uncertainty. the pan-european stoxx europe 600 edged up 0.04% to a record closing high of 657.14. france's cac 40 rose 0.03% to 8:uropean Stoxx Europe 600 edged up 0.04% to a record closing high of 657.14. France's CAC 40 rose 0.03% to 8,669.3, while Britain's FTSE 100 gained 0.08% to 10,888.3. Spain's IBEX 35 outperformed most major regional indexes, rising 0.17% to 20,057. Germany's DAX 40 fell 0.29% to 26,126.3, while Italy's FTSE MIB 30 slipped 0.18% to 53,446.8.

According to Anadolu Agency, investor sentiment was supported by expectations that the US and Iran could reach an agreement to reopen the Strait of Hormuz, easing concerns about global energy supplies and inflation. However, uncertainty over developments in the Middle East limited gains in several major markets. Corporate earnings also remained a key driver, with strong company results helping offset weakness linked to geopolitical risks.

The euro rose 0.11% against the US dollar to 1.1546 as of 1725GMT. Data released Wednesday showed eurozone business activity expanded at its fastest pace in eight months in July. The final HCOB eurozone composite Purchasing Managers' Index rose to 52 from 50 in June, signaling stronger economic activity. Growth was driven by a recovery in services alongside continued expansion in manufacturing, while new orders rose at their fastest pace since November.

Separately, eurozone industrial producer prices fell 0.3% month on month in June after increasing 0.2% in May, largely due to a 1.5% decline in energy prices. Compared with June 2025, producer prices were up 4.6%.