European stock markets edged closer to record highs on Tuesday, with consumer goods and retail sectors leading gains, as signs of easing tensions between the United States and Iran contributed to a decline in oil prices.
The Stoxx Europe 600 index rose 0.4% to 652.09 points, just shy of its July 3 closing record of 652.77 points. Both the Germany DAX and the Euro Stoxx 50 indexes also reached new highs.
Meanwhile, energy stocks underperformed. Iran signaled that negotiations to allow more vessels through the Strait of Hormuz were making progress, following U.S. President Donald Trump's cancellation of what he described as a planned large-scale strike against the country.
On the individual stock front, shares of AstraZeneca fell 9.0% after sources said the British pharmaceutical company had considered acquiring Bristol-Myers Squibb.
Data showed that earnings for MSCI Europe index components are projected to grow 14% in the second quarter, exceeding expectations.
"The upward revision cycle for European corporate earnings is much healthier than many investors anticipated at the start of the year," said Violeta Todorova, senior research analyst at Leverage Shares. "Defense spending, fiscal investment, improved industrial activity, and a gradual recovery in manufacturing are all driving a broader improvement in corporate profits."
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