European Stocks Edge Up as Middle East Tensions Ease, Breaking Monthly Losing Streak

European stocks made slight gains on Tuesday amid hopes of easing Middle Eastern tensions, providing a temporary lift to investor sentiment. However, despite this upturn, the pan-European STOXX 600 index remained poised for its steepest monthly drop since 2020 due to ongoing supply-chain disruptions.

By 0708 GMT, the STOXX 600 had risen 0.2% to 581.92 points but had still declined 8.2% in March, ending an eight-month series of gains and preparing for its first quarterly downturn in five. Financial services stocks experienced a 0.8% increase, leading sector gains. The Wall Street Journal's report that U.S. President Donald Trump expressed willingness to cease military actions against Iran brought cautious optimism on the trading floor.

At the start of March, European equities were near record highs, but the U.S.-Israel conflict with Iran triggered oil supply disruptions, increased oil prices, and adversely affected growth and inflation expectations. Investors remained focused on the eurozone's impending consumer price readings, which are poised to reveal the war's economic impact. In corporate movements, Unilever saw a boost of 0.7% after announcing advanced merger talks with McCormick, potentially bringing in $15.7 billion in cash to the conglomerate.