European shares gain on softer US Iran sanctions, falling oil prices The healthcare sector advanced the most - The Stoxx 600 closed 0.35 per cent higher at 656.48 points on Tuesday. PHOTO: REUTERS EUROPEAN shares rose on Tuesday (Aug 25) as investors took comfort from a softer-than-feared US sanctions package on Iran and falling oil prices, with gains in heavyweight industrials and healthcare stocks lifting the benchmark.

US Treasury Secretary Scott Bessent’s fresh measures to stifle Iran economically had limited impact on markets, as Washington stopped short of imposing any penalties on Teheran’s trading partners. Iran promised to retaliate against the expanded US sanctions and said it was confident major trading partners would resist Washington’s pressure campaign.

The pan-European Stoxx 600 closed 0.35 per cent higher at 656.48 points, just 0.6 per cent away from its record high hit earlier this month. The healthcare sector led gains with a 1.2 per cent rise. Novo Nordisk advanced 2.9 per cent after JPMorgan raised its price target for the Danish obesity drug maker, citing increased long-term sales forecasts.

Peer Zealand Pharma climbed 5.6 per cent. Industrials advanced 1.1 per cent, rising the most in three weeks as Melrose Industries climbed 10.4 per cent after the British aerospace components supplier gave a timeline for resuming full production at GKN Aerospace.

Production was halted in late May at a suburban Los Angeles plant after an overheating tank raised fears of an explosion. Defence and aerospace shares also edged 0.9 per cent higher as a result. Investors also assessed signs of a turnaround in Germany’s economy, as gross domestic product grew faster than expected in the second quarter and business morale hit its highest level in a year in August.

“While it’s still too early to call this a self-sustained economic recovery, growth above potential in the first and second quarters of the year, together with four consecutive months of increasing sentiment, are promising,” said Carsten Brzeski, global head of macro at ING.

Brzeski warned however that elevated oil prices, a likely upcoming shock from higher gas prices in the next heating season and renewed trade tensions pose risks to the German outlook. Crude prices fell 3.5 per cent as traders saw little immediate threat to global crude supplies from the latest US measures.

Federal Reserve Chair Kevin Warsh’s Jackson Hole debut later this week is in focus for clues on rising bond yields and central bank independence. Limiting the gains on the benchmark, luxury stocks fell 1.2 per cent as Gucci parent Kering slipped 3.3 per cent.

The tech sector rose 0.2 per cent ahead of Nvidia’s results on Wednesday, amid concerns the chipmaker may struggle to meet lofty expectations. European software and data stocks ended lower as Alphabet’s Google announced its Gemini Enterprise tool for lawyers and law firms.

French corporate services firm Capgemini and Amsterdam-listed software maker Wolters Kluwer fell the most, by 1.8 per cent and 3.1 per cent, respectively. REUTERS Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter.

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Secretary of State Marco Rubio has told several of his foreign counterparts in recent days that "for the time being" the U.S. is not expected to initiate new strikes against Iran, according to a U.S. official and a second source with knowledge of the matter.

Instead, he's said the focus is on other means of pressure, including the sanctions initiative announced this week. Why it matters: Rubio's message to foreign ministers from several allied countries comes as the U.S. believes it's suffocating Iran with the naval blockade — while moving ever-increasing amounts of oil out of the Strait of Hormuz.

It's also another sign that President Trump is exasperated with the war and wants it to be over, at least for now. The U.S. official said that while Rubio made clear that the U.S. isn't planning a return to major combat operations, he didn't rule out strikes if Iran attacks first.

Another U.S. official said the clearing of mines from the Strait of Hormuz by the U.S. Navy is a watershed moment in the war, largely neutralizing one of Iran's main sources of leverage. Behind the scenes: The sources said Rubiooutlined the Trump administration's current Iran policy in phone calls with several of his counterparts: Avoiding military action against Iran for the time being.

Transporting as much oil as possible through the strait and into global energy markets. A second U.S. official said this is expected to be the policy at least until after the midterm elections, when a new military campaign could again be on the table.

State of play: U.S. officials say the clearing of mines from most of the Strait of Hormuz, coupled with the fact that more and more tankers have been moving through the southern lane of the strait in recent weeks, significantly reduces Iran's leverage over global energy markets.

"The Iranians have lost control over the strait. Now the U.S. controls it," one U.S. official said. The U.S. naval blockade is depriving Iran of critical revenue. Over the last two weeks, almost no tankers have been spotted at Kharg Island, Iran's main oil export hub, U.

S. officials say. "The Iranian economy is in free fall and the regime's military has been decimated," State Department spokesman Tommy Pigott told Axios, "and we are cutting off every financial lifeline the regime has remaining." He added, "The President has been clear that Iran cannot have a nuclear weapon, and that he will use the tools necessary to ensure that objective is accomplished.

" The big picture: Pakistan's army chief, Field Marshal Asim Munir, was in Tehran on Sunday for talks with the Iranian leadership. Pakistan has been a key mediator between the U.S. and Iran since the war began. According to Al Arabiya, the Saudi-affiliated TV station, Munir spoke to Trump before the trip and suggested a new proposal for the Iranians.

The White House didn't deny that Trump spoke to Munir but said there are no current or scheduled negotiations with Iran. U.S. officials say that the new developments in the strait and the growing volume of oil coming out of the Gulf have deprived Iran of a major card in any future negotiations and made any potential deal between Oman and Iran regarding the strait irrelevant.

"Right now we are not negotiating with Iran. We are squeezing them. The pressure could drive the Iranians back to the table," a U.S. official said. What to watch: White House envoys Steve Witkoff and Jared Kushner, who have been leading the negotiations with Iran, are expected to visit U.

S. Central Command on Wednesday for briefings on the situation on the ground, according to a source with knowledge.

On June 8, 2026, reports indicated that further escalation risked disrupting ongoing diplomatic efforts to secure a permanent end to the conflict between Iran and the US. These developments occurred amid unresolved tensions between the two nations.

Jun 22, 2026 ... The last time the IAEA had access to the declared military sites affected by those strikes was in June 2025, and the agency stopped all in-field ...