European stocks rose on Tuesday, recovering from a dismal start to the week, as investors grew optimistic about the possibility of peace negotiations in the Middle East, despite the United States imposing a blockade on Iranian ports. The Stoxx 600 European index gained 0.6% to 617.58 points. Germany's DAX rose 0.95%, the UK's FTSE 100 rose 0.20%, and France's CAC rose 0.60%. Sources familiar with the negotiations told Reuters that the American and Iranian negotiating teams may return to Islamabad this week after talks between the two countries made no progress. This development was enough to boost stocks, while oil prices fell below $100 a barrel. The European energy sector fell 0.2% during the day. Analysts warned that inflationary pressures from rising energy costs will persist as long as the vital Strait of Hormuz remains closed to shipping. European markets have faced significant challenges due to the continent's heavy reliance on energy imports. Despite these challenges, the Stoxx 600 has risen about 4% since the start of the year, slightly outperforming the US S&P 500, which rose 0.5% over the same period. Industrial and technology sector stocks rose 0.9% and 1.5%, respectively, leading the list of gaining sectors. Meanwhile, the personal and household goods sector led the losses, falling 0.4%. Shares of French luxury group LVMH fell 2% after the company announced a sales decline of at least 1% in the last quarter due to reduced spending in the Gulf region due to the war with Iran.
