European Shares Edge Higher on Busy Earnings Day Amid Middle East Uncertainty
Market Overview and Key Drivers
August 4 (Reuters) - European shares inched higher on Tuesday as investors weighed a busy slate of corporate earnings, while keeping an eye on the Middle East after conflicting signals from the United States and Iran over efforts to end their five-month-old war.
The pan-European STOXX 600 index was up 0.6% at 656.27 by 0710 GMT.
Sector Performance
Energy Stocks and Oil Prices
Energy stocks inched up 0.1% as oil prices rebounded 1% after a sharp selloff in the previous session. Concerns persisted that Middle Eastern supply could remain vulnerable, with a diplomatic breakthrough in the U.S.-Iran conflict — which has disrupted oil shipments — still appearing elusive. [O/R]
Market Sentiment Amid Conflict
Markets have repeatedly swung between optimism and pessimism since the conflict began in late February, as both sides have struggled to reach a mutually acceptable resolution. The European benchmark has gained over 5% since the start of the conflict, recovering from lows hit in March.
Travel and Leisure Stocks
Travel and leisure stocks fell 0.4%, reflecting renewed concerns over elevated fuel costs.
Corporate Earnings Highlights
European Earnings Season
The European earnings season was in full swing, with investors parsing company updates for clues on the region's business outlook.
Lufthansa
Shares of Lufthansa dropped 9% after the German airline on Tuesday set a range for its 2026 adjusted operating profit, after that figure more than halved in the second quarter due to higher fuel costs tied to the U.S.-Iran war.
Zalando
Zalando fell 13.2% after the retailer forecast 2026 revenue and growth to land in the lower half of its previously guided range and narrowed its adjusted operating profit outlook.
Bayer
Shares in Bayer rose 3.7% after the German pharmaceuticals group reported an unexpected 1.9% increase in quarterly operating profit.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Mrigank Dhaniwala)
