European shares concluded Tuesday on a positive note, as softer-than-expected U.S. inflation data eased concerns over potential Federal Reserve interest rate hikes. Meanwhile, heightened U.S.-Iran tensions and rising crude oil prices tempered gains.
The pan-European STOXX 600 index finished 0.2% higher at 642.1 points, recovering from earlier losses. Basic materials stocks surged by 2.4% as metal prices rallied following a weaker dollar, thanks to the latest U.S. inflation figures showing slower-than-anticipated consumer price growth.
However, oil prices rose as the U.S. reinstated a naval blockade on Iran, increasing concerns about energy flows through the Strait of Hormuz. This geopolitical development led to a 1.3% rise in European oil and gas stocks. In contrast, the software sector experienced declines, notably with SAP and Capgemini affected amid warnings from IBM about the impact of an AI boom on software budgets.
(With inputs from agencies.)