European shares near record high as oil falls
European shares moved close to a record high on Tuesday, 10 November 2026, as falling oil prices and easing concerns about a possible military escalation between the United States and Iran boosted risk appetite across the region.
Europe's benchmark STOXX 600 index gained 0.9% to 662.54 by 0805 GMT, according to Reuters. The pan-European benchmark was trading within 1% of its record high, last reached in early August, on renewed hopes that easing Middle East tensions could curb energy-driven inflation worries and dampen expectations for higher interest rates.
Benchmark indexes in Germany, France and Italy each rose about 1% in early trading. At the open, France's CAC 40 was up 1.20%, Germany's DAX was up 1.14%, Italy's FTSE MIB was up 1.20% and London's FTSE 100 was up 0.73%.
Banks lead as oil stocks lag
Banks led the sectoral gains, climbing 2.6%, as investors bought back into financial stocks after last week's sell-off. The gains were broad-based, with technology and industrial stocks also higher, while oil stocks were the day's laggards, dropping 1.1% as crude prices fell.
Lower oil prices also boosted airlines, which have been grappling with elevated fuel costs. Lufthansa gained 1.8% and Air France-KLM added 1.2% after Brent crude fell more than 2% to $90 a barrel following President Donald Trump's comments that he would hold off on bombing Iran.
"There were concerns that he was going to go all out before the end of the year," Daniela Hathorn, senior market analyst at Capital.com, said. "The way the Congress is set up now, that is not likely going to be the case, and there potentially is going to be a better framework towards a resolution in the near future."
The rally followed strong gains on Monday, when the STOXX 600 advanced 1.3%, Germany's DAX surged 1.7%, France's CAC 40 rallied 1.2% and the FTSE 100 added 1%. In Asia on Tuesday, Japan's Nikkei 225 closed 2.9% higher, while US stocks had rallied sharply on Monday, with the S&P 500 up 2.35% and the Nasdaq Composite up 2.74%.
Infineon jumps on 2027 outlook
Among individual stocks, chipmaker Infineon rose 6.6% after forecasting revenue growth of more than 20% in 2027 alongside a roughly five-percentage-point increase in profitability, driven by demand from data centres, power infrastructure and software-defined vehicles.
The optimism also lifted other chip stocks, including Soitec, which rose 5.6%, and Aixtron, up 3.5%. Potash producer K+S gained 2.3% after beating third-quarter earnings expectations, while Edenred rose 4% after a court judgment showed a Brazilian judge had suspended part of the new meal voucher rules for companies in a local lobby group, which includes Pluxee and Edenred's Ticket.
A stronger-than-expected corporate earnings season has also underpinned the rally. Third-quarter earnings in Europe are now expected to rise 25%, up from a previous estimate of around 16%, according to LSEG data. The earnings growth gap between Europe and the US narrowed to its smallest level in more than three years this reporting season, while Europe matched or outperformed the US in six sectors, according to Deutsche Bank.
US inflation data in focus
Later in the day, the market's focus was due to shift to the US inflation report for October, which could help determine the outlook for US interest rates. Consensus forecasts pointed to annual inflation accelerating to 3.9% in October from 3.7% in September.
Investors expect the European Central Bank to wait for more data through the end of the year and potentially raise interest rates by February next year, according to market expectations reported on Tuesday. The next major test for the rebound will be the US consumer price data and the reaction in equities and bond yields that follows.
European shares have now recovered much of last week's technology-led sell-off, but traders cautioned that the move still looked more like a relief rally after panic selling than a full trend reversal, with the US inflation reading yet to come.
