The pan-European STOXX 600 index was up 3.6% at 611.86 points

European shares climbed more than 3% on Wednesday as ​a two-week Middle East ceasefire sparked a relief rally across markets, raising hopes that ‌oil and gas flows through the Strait of Hormuz could soon resume.

The pan-European STOXX 600 index was up 3.6% at 611.86 points, as of 0834 GMT, and poised for its biggest one-day jump in a year, if the current momentum persists.

Markets also ​mirrored the move, with Germany’s DAX up 4.7%, while London’s FTSE 100 jumped 2.5%.

Europe’s fear ​gauge, the STOXX volatility index, dropped below 25 for the first time in three weeks.

Beyond the immediate relief, investors are waiting to see whether the truce can pave the way for a lasting resolution.

Some of the residual risks are still out there, said ​Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management.

Investors should not be surprised if we do see some ​period of re-escalation in rhetoric, or if some of the energy flows through the Strait of Hormuz perhaps disappoint what people ‌might hope ⁠for. But overall, the announcement is a positive development, Ganesh said

Energy markets responded sharply, with Brent crude futures dropping 12.3%, below $100 a barrel, offering some respite after weeks of elevated oil prices.

The gains on ⁠Wednesday were broad-based, with travel, industrials, and banking adding between 6% and 7%. They are typically seen as prime beneficiaries of lower energy costs and declining bond yields.

The ​technology sector climbed 6.2%, underpinned by strong performances among chipmakers. Shares of Infineon, Soitec, ​ASML and ⁠SUSS Microtec were up between 6.5% and 11.3%.

Energy stocks were the sole outliers, down 4%, as crude prices tumbled following reports of the ceasefire. Oil firms BP, TotalEnergies and Equinor declined between 6% and 12%.

Shell weighed the most on STOXX ⁠600, ​down 6.5%, after the oil major cut its first-quarter gas production outlook while ​signalling a surge in oil trading profit and a dent to short-term liquidity.

Traders are currently pricing in two quarter-point rate hikes from the ​European Central Bank by the year-end, according to LSEG-compiled data.