Europe midday: Shares hold gains despite jump in eurozone inflation

(Sharecast News) - European shares held gains on Tuesday despite continuing uncertainty about the US-Iran ceasefire, Israel's attacks on Lebanon, a heavy Russian bombardment on Ukraine overnight and a jump in eurozone inflation.

The pan-regional Stoxx 600 index was up 0.70% to 625.54 at 1141 BST with all major bourses higher.

US President Donald Trump said Israel and the Iran-backed Hezbollah militia based in Lebanon had agreed to stop fighting each other, despite the fact that both sides were still firing and Israel Prime Minister Benjamin Netanyahu said he would attack Beirut.

Meanwhile, peace talks with Iran continued to drag on as Tehran insisted Lebanon be tied into any final agreement. Brent crude oil prices held at around $94 a barrel as the Strait of Hormuz remained closed to most traffic.

Oil hit $95 on Monday after Iran suspended peace talks due to Israeli pushing further into Lebanon.

Meanwhile, Russia launched 73 missiles and 656 drones at Ukraine according to the Ukrainian air force, hitting major centres including Kyiv, Dnipro and Kharkiv, killing at least 11 people.

On the economics front, Eurozone inflation rose to 3.2% last month an official flash estimate showed on Tuesday as higher energy prices caused by the US-Israel war on Iran and Lebanon put the European Central Bank under more pressure to lift interest rates.

The figure compares with 3% in April - well above the ECB's 2% target. Policy makers at the central bank meet next week to vote on rates.

Energy inflation rose to 10.9% in May, while services rose by 3.5% year on year.

In equity news, shares in Prosus jumped as the EU this week gave the Amsterdam-listed technology investor more time to comply with a requirement to reduce its shareholding in Delivery Hero in order to get approval for its acquisition of Just Eat Takeaway.

However, Prosus is considering using this waiver to temporarily increase its stake, either to block Uber's potential takeover or to give itself a better bargaining position, the Financial Times newspaper reported.

Shares in semiconductor group STMicroelectronics rallied after the chip contract manufacturer raised revenue guidance for its data centres business.

Abivax tanked as the French biotech firm reported that several patients in its ulcerative colitis trial had developed cancer.

Analysts at broker Jefferies said the cancer cases "broke" its investment theses. In a note to investors, analysts said: "Even if proven to be not drug-related or very low incidence, we expect an overhang to investor interest, strategic optionality and commercial uptake."

Bayer shares fell after plaintiffs sought to transfer a proposed $7.25bn US settlement over Roundup weedkiller to a federal court in California. The German company said it intended to oppose the move from a Missouri state court.

Reporting by Frank Prenesti for Sharecast.com