European shares edged higher on Tuesday, supported by gains in energy stocks as persistent uncertainty in the Middle East kept oil prices elevated, while investors awaited key economic data later this week for fresh signals on growth, inflation and the outlook for interest rates, Reuters reported.
The pan-European STOXX 600 rose 0.1% to 661.39 points as of 0717 GMT, according to Reuters.
The energy sector advanced about 1% as oil prices climbed to their highest level so far this month. The gains came as concerns over potential disruptions around the Strait of Hormuz continued to keep crude prices elevated.
Reuters reported that prolonged disruption to the crucial oil-shipping route could fuel inflationary pressures and complicate expectations for monetary easing by central banks.
U.S. President Donald Trump on Monday responded to Iran's conditions for a potential peace agreement with demands of his own, including compensation for people killed in wars, attacks and protests. The escalation in rhetoric could further complicate efforts to reopen the strategically important shipping route, Reuters reported.
The rise in fuel prices weighed on travel and leisure stocks, which fell 0.7%. Investors remained concerned that sustained increases in energy costs could raise operating expenses for airlines and other travel-related companies.
Technology stocks provided some support to the broader market, gaining 0.4%.
Investors Await Key Economic Data
With the European earnings season nearing its end, corporate developments were relatively limited, shifting investor attention toward macroeconomic data.
Markets are set to focus on euro zone employment figures, gross domestic product data and U.S. consumer price inflation figures due later this week. Reuters reported that the data could offer important clues about the strength of economic activity, inflationary pressures and the future direction of interest rates.
Alcon Surges After Forecast Upgrade
Among individual stocks, Alcon jumped 5.7% after the Swiss-American eye-care company raised its full-year earnings forecast.
The strong move in Alcon stood out in an otherwise relatively subdued European corporate news flow as investors balanced the support from higher energy prices against concerns that geopolitical risks could keep inflation elevated and delay monetary policy easing.
