European equities rose on Tuesday as investors responded to easing concern over Middle East tensions while continuing to assess interest rate expectations, energy prices and corporate deal activity. The session showed a more constructive tone across parts of the region, although gains were not uniform and investors remained selective.
Italy was the strongest major market, with the FTSE MIB touching an intraday record high. Banking shares led the advance as investors focused on consolidation in the domestic financial sector. Banca Monte dei Paschi di Siena remained in the spotlight following takeover interest, while Intesa Sanpaolo moved higher after launching a major cash-and-share offer for a domestic rival.
The wider European market also moved higher. The STOXX 600 advanced, while France’s CAC and Germany’s DAX gained ground. Spain’s IBEX 35 also rose, adding to the positive regional tone. The UK’s FTSE 100 underperformed, suggesting investors were still differentiating between markets and sectors rather than making a broad move into risk assets.
Easing tensions between Iran and Israel helped improve market sentiment, particularly after concerns over the Strait of Hormuz had added pressure to global risk assets. Brent crude fell for a fourth straight session, but remained above levels seen before the conflict.
Monetary policy remained a key focus ahead of the European Central Bank’s upcoming meeting. Investors were preparing for the possibility of a further rate increase as policymakers continued to prioritise inflation control. This kept attention on companies with resilient earnings, pricing power and balance sheets that can better withstand higher borrowing costs.
JPMorgan European Discovery Trust plc is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
