ISTANBUL

European stock markets closed higher on Tuesday as investor sentiment improved on optimism over a possible ceasefire in the Middle East, although regional equities still ended March with their biggest monthly loss since mid-2022.

The benchmark Stoxx Europe 600 index rose 0.41% to close at 583.14 points.

Among major bourses, the UK’s FTSE 100 gained 0.48% to 10,176.45, Germany’s DAX 40 added 0.52% to 22,680.04, France’s CAC 40 climbed 0.57% to 7,816.94, and Italy’s FTSE MIB 30 advanced 1.11% to 44,309.71.

The euro also strengthened, with the euro/dollar parity up 0.76% to 1.1549 as of 1730GMT.

European markets welcomed reports suggesting that US President Donald Trump is willing to end attacks on Iran, raising hopes of a possible de-escalation in the region.

Despite Tuesday’s rebound, the Stoxx Europe 600 ended March down 8%, marking its steepest monthly decline since the middle of 2022.

Meanwhile, annual inflation in the euro area accelerated to 2.5% in March, driven by rising energy prices, marking the highest increase since May 2022 amid ongoing tensions in the Middle East.

The European Commission also urged member states to encourage citizens to use fewer cars and take fewer flights because of the impact of developments in the Middle East on energy supply.