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(Sharecast News) - European shares extended gains on Tuesday as investors shrugged off jitters about rising inflation and energy supply shortages caused by the Iran war and pinned their hopes on the latest peace negotiations between Washington and Tehran.
The pan-regional Stoxx 600 index was up 0.90% to 615.66 at 1155 BST. Germany's DAX gained 1.75%, the UK's FTSE 100 rose 0.71% and France's CAC 40 increased by 0.87%.
US President Donald Trump on Monday claimed that he had called off an attack on Iran scheduled for Tuesday at the behest of Qatar, Saudi Arabia and the United Arab Emirates.
"A Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond. This Deal will include, importantly, NO NUCLEAR WEAPONS FOR IRAN!," Trump said on social media.
Oil prices slipped on the news, with Brent Crude currently hovering at around $110, but still well above levels before Trump and Israel started their war of choice at the end of February with still no sign of any resolution to the Hormuz strait blockade.
"Risk sentiment is mixed on Tuesday, as investors weigh up the costs of the war in the Middle East. Although the oil price initially fell on the back of comments from Donald Trump that the US would not strike Iran and break the ceasefire today, the President's impact on the oil price did not last for long," said XTB research director Kathleen Brooks.
"There is a sense of frustration that there has been no break in the impasse between the US and Iran and no clear path to a deal to end the war."
In economic news, Britain's unemployment rate rose unexpectedly to 5% in the three months to March, up from 4.9% in February, as employers cut back on hiring.
"The important point for markets is that businesses appear to be responding to higher costs by cutting headcount, not by pushing wages materially higher to compensate workers," said Hargreaves Lansdown analyst Matt Britzman.
"That should help keep the coming inflation spike contained to a short-term energy shock rather than the start of a wage-price spiral, giving the Bank of England a little more room to sit tight rather than rush into further rate hikes."
In equity news shares in Evolution Gaming jumped as the company announced a 2bn share buyback.
Vallourec tumbled 10.3% after ArcelorMittal sold secondary shares of a 10% stake in the French steel tubes maker at a discount.
Reporting by Frank Prenesti for Sharecast.com