European shares climb on Iran sanctions relief, defence gains

European equities experienced a modest upward trend on Tuesday, as investors found solace in the less severe US sanctions package imposed on Iran. The pan-European STOXX 600 index rose by 0.3% to 656.14, as of 0718 GMT, with defense stocks driving the sectoral gains, up 1%. On Monday, the Trump administration had warned countries to sever their business relationships with Iran or face secondary sanctions as part of what it termed an "economic D-Day," although the Treasury Department had refrained from enforcing any penalties.

Oil prices continued to decline as traders anticipated no immediate threat to global crude supplies from the latest US measures. Iran vowed to retaliate against the expanded sanctions and expressed confidence that major trading partners would resist Washington's pressure campaign. Meanwhile, US Treasury yields eased from recent highs following reports that the Treasury might utilize its cash reserves to fund larger debt buybacks, potentially diminishing the need for additional sales of short-term bills.

The technology sector gained 0.3%, with investors eagerly awaiting Nvidia's earnings report on Wednesday, amid apprehension that the chipmaker may fail to meet high expectations.