The pan-European STOXX 600 index rose by 0.61% to 628.93 points as of 0712 GMT, nearing a record high last seen in late February. The rise was driven by optimism over potential peace negotiations between the United States and Iran, which could ease tensions in the Middle East and stabilize global oil prices.
Most sectors saw gains, with banks rising 1.7% and regional airlines like Lufthansa and Air France KLM climbing 4.2% and 9%, respectively, as Brent crude prices fell 5% to $98 a barrel.
The STOXX 600 has lagged behind global peers due to concerns that higher crude prices could increase inflationary pressures in Europe.
Meanwhile, Delivery Hero shares surged 12% following reports that Uber's board discussed raising its offer for the German food-delivery company, after a major shareholder rejected a bid valuing it at over 11.5 billion euros ($13.39 billion).
Trading volumes are expected to be light due to public holidays in the U.S. and UK.
Background
The potential reopening of the Strait of Hormuz, a critical passage for one-fifth of the world's crude oil and natural gas, could have significant implications for energy-dependent Europe.
Investors will be closely watching for further developments in the Iran-US negotiations, which could impact global markets and energy prices.
