BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks closed higher on Tuesday, with some of the markets in the region hitting fresh record highs, or multi-month highs, as easing worries about tech valuations, optimism about U.S.-Iran peace talks and weak oil prices aided sentiment.
Some encouraging corporate earnings announcements and data from the U.S. showing a sharp rise in manufacturing activity in the world's largest economy helped as well.
Despite some uncertainty about Iran and the U.S. engaging in any meaningful talks, there is a bit of optimism about the two countries reaching a deal to reopen the Strait of Hormuz within the next couple of days.
'We are in talks with the Iranians,' U.S. Treasury Secretary Scott Bessent told CNBC's 'Squawk Box.' 'There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict.'
Brent crude futures fell nearly 6% to $78.70 a barrel, easing worries about inflation and interest rates.
The pan European Stoxx 600 climbed 0.73%. The UK's FTSE 100 gained 0.2%, Germany's DAX ended up by 0.77% and France's CAC 40 moved up 0.61%, while Switzerland's SMI settled with a gain of 0.64%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Poland, Spain, Sweden and Türkiye closed higher.
Iceland, Norway and Russia ended weak, while Portugal closed flat.
In the UK market, mining stocks turned in a fine performance, while energy stocks drifted down on weak oil prices.
Antofagasta surged nearly 7%, Anglo American Plc moved up 5.5%, Fresnillo climbed 5.3%, Endeavour Mining gained 3.4% and Rio Tinto advanced 3.2%, while Glencore posted a gain of 2.15%.
Halma climbed 5.5%. Polar Capital Technology Trust also ended up by about 5.5%. Melrose Industries, Computacenter, Barratt Redrow, ICG, Babcock International, Scottish Mortgage, Aberdeen Group, Spirax Group, Croda International, Standard Chartered and Kingfisher gained between 2%-4%.
Building materials supplier Travis Perkins soared 18.5% after reporting strong interim results.
Shares of medical products company Smith & Nephew dropped more than 6% after the group cut its full-year revenue growth forecast, citing weaker demand for hip and knee implants in the United States.
HSBC Holdings ended 0.8% down. The bank raised its target for cost savings and announced a new share buyback after reporting better-than-expected second-quarter results. For the six-month period to June 30, HSBC Holdings reported a net income of $14.626 billion, or $0.85 per share, compared with $11.510 billion, or $0.65 per share in the same period last year.
Shell shed 2.4%. BP closed nearly 5% down. Coca-Cola Europacific Partners lost 4%. Pearson, British American Tobacco, Admiral Group, Tesco, Associated British Foods, Haleon, Prudential, Diageo, Coca-Cola HBC and Imperial Brands also ended notably lower.
In the German market, Bayer moved up nearly 2.5%. The German conglomerate posted an unexpected increase in second-quarter profit, helped by a strong performance in its crop science business.
Infineon climbed 3.7%. Airbus, Merck, Commerzbank, Siemens Energy, Symrise, Rheinmetall, SAP, Deutsche Bank, Vonovia, Hochtief and Heidelberg Materials gained 1.2%-3%.
Shares of online retailer Zalando tanked 13.4% after the company revised its 2026 revenue and growth outlook to the lower end of its previously guided range.
Fresenius Medical Care dropped nearly 8%, weighed down by a report from the company that treatment volumes in the U.S. declined for a second straight quarter.
Continental drifted down 1.6%. The tyre maker reported a sharp fall in second-quarter net income after the spin-off of Aumovio.
Adidas eased by about 2.5%. Hannover Re, Daimler Truck Holding, Beiersdorf, BASF and Munich RE lost 1%-1.6%.
Lufthansa dropped more than 8% after the airline group warned of a lower operating profit this year, citing an uncertain geopolitical and macroeconomic environment.
In the French market, STMicroelectronics surged 6.5%. ArcelorMittal climbed 4.3%. Thales, Teleperformance, Schneider Electric, Airbus, Legrand, Dassault Systemes, Veolia Environment, Saint-Gobain, Eurofins Scientific and Stellantis gained 1.5%-3.4%.
Safran, Vinci, EssilorLuxottica, Accor, Air Liquide, Edenred and Unibail Rodamco also closed on firm note.
TotalEnergies lost 2.8%. Kering ended more than 3% down. Pernod Ricard, Orange, Carrefour, L'Oreal and Michelin also closed weak.
In economic news, France's state budget deficit widened to EUR 106.8 billion in January-June 2026 from EUR 100.4 billion in the same period last year, as higher spending outpaced revenue growth. General budget revenues increased 3.7% year-on-year to EUR 184.6 billion, while expenditures rose 5.4% to EUR 240.5 billion.
The Institute for Supply Management released a report on Monday showing its reading on U.S. manufacturing activity increased by more than expected in the month of July.
The ISM said its manufacturing PMI climbed to 55.6 in July from 53.3 in June, with a reading above 50 indicating growth in the sector. Economists had expected the index to rise to 54.0.
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