European Shares Gain As Falling Oil Prices Lift Sentiment

European stocks closed broadly higher on Tuesday as falling energy prices and easing concerns about a further escalation in the Middle East lifted investor sentiment. Markets also digested a fresh batch of economic data from across the region.

The limited market impact of fresh US sanctions on Iran also helped support sentiment.

Brent crude futures fell nearly 4 percent to around $87 a barrel, easing concerns about inflation and interest rates.

The pan-European Stoxx 600 climbed 0.35 percent. Germany’s DAX gained 0.61 percent, the UK’s FTSE 100 rose 0.29 percent and Switzerland’s SMI added 0.54 percent, while France’s CAC 40 edged down 0.16 percent.

Elsewhere in Europe, markets in Austria, Belgium, the Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Norway, Poland, Portugal, Russia and Sweden closed higher, while the Netherlands, Spain and Turkey ended lower.

In London, Melrose Industries soared more than 10 percent, while AstraZeneca climbed 3 percent. Next, Polar Capital Technology Trust, IAG, Anglo American, Persimmon, Rolls-Royce Holdings, Admiral Group, Spirax Group, Computacenter, Marks & Spencer, Barratt Redrow, Experian, SSE, Glencore and Kingfisher gained between 1.5 percent and 2.3 percent.

Standard Chartered fell 2.5 percent, while Diageo, Compass Group, British American Tobacco, Smith & Nephew and Relx shed between 1 percent and 2 percent.

In Frankfurt, Scout24 jumped 4.5 percent and Siemens Energy climbed 2.7 percent.

Zalando, Siemens, Bayer, RWE, Heidelberg Materials, Daimler Truck Holding, Infineon, GEA Group, E.ON, MTU Aero Engines and Allianz gained between 1 percent and 2.2 percent.

Adidas, Siemens Healthineers, BASF, Beiersdorf, Brenntag, Rheinmetall and Henkel fell between 1 percent and 1.7 percent.

In Paris, Legrand gained 2.5 percent, while Schneider Electric, Stellantis, Saint-Gobain, Safran, Eurofins Scientific, Accor and Airbus rose between 1 percent and 1.6 percent.

Kering, Renault, Pernod Ricard, BNP Paribas, LVMH, Capgemini, EssilorLuxottica, Hermes International, Teleperformance, Danone, Carrefour and L’Oreal lost between 1 percent and 3 percent.

In economic news, France’s consumer confidence index remained unchanged at 86 in August, according to monthly survey data from statistical office INSEE. The reading remained below its long-term average and fell short of expectations for an increase to 87.

Meanwhile, German business confidence rose to its highest level in a year in August, suggesting the economy remained resilient despite tensions in the Middle East, low water levels on key transport waterways and higher energy prices, survey results from the ifo Institute showed.

The business climate index rose to 88.8 in August from 86.7 in July, its highest level since August last year.

Separate data from Destatis showed that the German economy expanded more strongly than initially estimated in the second quarter, growing 0.3 percent from the previous quarter. The figure was revised up from an initial estimate of 0.2 percent and followed growth of 0.4 percent in the first quarter.

On an annual basis, GDP growth accelerated to 1 percent in the second quarter from 0.7 percent in the first. The figure was revised up from the 0.9 percent estimated on July 30. Price-adjusted GDP also grew 1 percent year-on-year, following an increase of 0.8 percent in the previous quarter.