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The UK's blue-chip index advanced on Tuesday, supported by gains in mining-related shares as base metal prices strengthened, while energy stocks came under pressure following a decline in crude oil. Broader sentiment was also influenced by geopolitical developments, including renewed expectations of progress in US–Iran talks.

Inflation rose to 3.2% in May, a fourth-straight increase and the highest level since September 2023.

European natural-gas prices fell after President Trump said talks with Iran were continuing, though losses were limited by uncertainty about whether they'll reach an agreement.

Investors are awaiting data that will shed further light on the economic impact of the U.S.-Iran war.

European shares opened lower on Monday as escalating tensions in the Middle East weighed on investor sentiment, while markets also reacted to corporate developments involving British airline easyJet and Amsterdam-listed Universal Music Group. The pan-European STOXX 600 index was down 0.1% at 0709 GMT, extending the subdued mood seen at the end of the previous week.

Goldman Sachs has raised its 12-month target for the STOXX 600 index to 660, citing resilient corporate earnings growth and continued support from artificial intelligence-related investments despite the ongoing conflict in the Middle East. The pan-European benchmark index has remained close to record highs and gained 2.5% in May.

Goldman Sachs has raised its 12-month target for STOXX 600 index to 660, the U.S. brokerage said, citing resilient corporate earnings ​growth despite the war in the Middle East.

Market expectations that the European Central Bank will hike interest rates this year have already contributed to tighter financial and lending conditions. The "transmission of tighter policy is already underway," Goldman Sachs noted.

The European Central Bank's decision to keep rates ​unchanged last month was ‌a close call for some policymakers as signs of persistently high ​inflation made it hard ​to look past the energy-driven shock, ⁠the accounts of the ​meeting showed on Thursday.

Selling-price expectations eased across all business sectors, interrupting the steep upward trend seen in the last two months.