European equities advanced on Tuesday, rebounding from multi-week lows as easing concerns over U.S. sanctions against Iran reduced risks to global oil supply. The Stoxx Europe 600 index climbed 0.4%, with Germany’s DAX and France’s CAC 40 each up more than 0.4%, while the U.K.’s FTSE 100 added 0.1%.
Brent crude futures held relatively steady around $91.50 per barrel after a more than 2% decline overnight, as markets digested reports that Washington’s anticipated sanctions package against Tehran would not include immediate disruptions to crude supply channels. The stabilization in energy markets supported broader risk sentiment, with investors scaling back bets on severe supply-side shocks.
Germany’s economy expanded 1.0% on an annualized basis in the second quarter, surpassing expectations of 0.9% and accelerating from 0.7% in the prior period. On a sequential basis, GDP grew 0.3%, above preliminary projections of 0.2%. The stronger-than-expected performance reflected resilient external demand, particularly in chemicals, electronics, and transport equipment, while exports rose 2.0% quarter-on-quarter. The 10-year German Bund yield eased to 3.23%, signaling reduced safe-haven demand.
In corporate news, Chesnara’s shares surged nearly 5%, while Vistry gained 10% after announcing a £350 million program to fund social and affordable housing initiatives under government support. The moves underscored improving risk appetite in European markets, which had retreated to multi-week lows earlier in the week amid geopolitical uncertainty.
Analysts noted that the U.S. Treasury’s potential use of cash balances from its Treasury General Account to fund an expanded debt buyback program also supported asset valuations by reducing the net supply of short-term debt the market must absorb. The developments came ahead of a speech by Federal Reserve Chairman Kevin Warsh in Jackson Hole on Friday, with investors monitoring for signals on monetary policy direction amid evolving macroeconomic conditions.
