European stocks traded broadly flat to higher on Tuesday as investors began September by looking past another rise in oil prices amid escalating tensions between the US and Iran. The uptick in energy costs is adding to existing inflationary pressures and reinforcing expectations that the ECB will continue to raise interest rates. Upcoming eurozone flash inflation data are likely to further underpin the case for additional monetary tightening.
At the sector level, chemicals were among the standout performers. Shares in Air Liquide climbed about 3.8% following reports that activist investor Elliott Management has built a stake in the company. Technology stocks also advanced, with ASML up 1.5% and Infineon gaining 2.5%.
The energy sector provided further support, as higher oil prices boosted major names: TotalEnergies rose 2.1% and Eni added 1.6%. By contrast, several blue chips weighed on the market, with Rolls-Royce down 3.8% and Rheinmetall slipping 1.8%, while Roche fell 2% and SAP declined 2.1%.
