European markets staged a recovery on Tuesday as investor sentiment improved, with the Stoxx 600 climbing around 0.7% after recent losses. The rebound came as oil prices eased, driven by renewed expectations of diplomatic progress in the Middle East following reports of a temporary pause in hostilities involving Israel and Hezbollah in Lebanon.
Major regional indices also moved higher, with the UK’s FTSE 100 up about 0.4%, France’s CAC 40 gaining roughly 0.7%, and Germany’s DAX rising close to 1%. The bounce followed a weak start to the week, when geopolitical tensions had pushed the Stoxx 600 to a one-week low before sentiment began to stabilize.
Energy markets remain central to the story, as falling oil prices eased immediate inflation pressure concerns. However, inflation in the eurozone still ticked up to an estimated 3.2% in May, with energy costs surging by double digits. This has kept traders focused on the European Central Bank, with expectations rising that the European Central Bank may lean toward further tightening at its upcoming policy meeting.
In corporate news, French biotech firm Abivax saw its shares plunge sharply after reports that several patients in its ulcerative colitis clinical trial developed cancer. The sell-off wiped nearly a third off its value in early trading, as analysts warned the safety concerns could overshadow future growth prospects and delay investor confidence in its pipeline.
Beyond markets, geopolitical uncertainty continues to weigh on global sentiment. Investors are closely watching stalled U.S.–Iran negotiations, ongoing tensions in the Strait of Hormuz, and escalating Russia–Ukraine conflict risks, all of which continue to influence energy prices and risk appetite across global equities.
source: cnbc