European stocks rallied on Tuesday as declining oil prices boosted investor confidence and helped markets recover from recent losses. The pan-European STOXX Europe 600 rose about 1.6% by midday in London, putting the index on track to break a three-day losing streak. Major national benchmarks including Germany’s DAX, France’s CAC 40 and the UK’s FTSE 100 also climbed as investor sentiment improved across the region.
The rally followed a sharp overnight drop in global crude prices after comments from U.S. President Donald Trump suggested the conflict affecting energy markets might be nearing its end. Oil prices had surged above $100 a barrel earlier in the week but later retreated, helping ease concerns over energy costs and inflation pressures. Despite the decline, prices remained elevated compared with recent months.
Airline companies were among the biggest beneficiaries of the oil pullback, as fuel costs represent a significant portion of their operating expenses. Shares of Lufthansa jumped more than 7%, while Air France-KLM gained around 4.5%, recovering losses from the previous trading session. Investors also pushed travel and leisure stocks higher across European exchanges.
In corporate developments, German automaker Volkswagen reported a challenging year, revealing that its operating profit dropped 53% year-on-year to 8.9 billion euros. The company attributed the decline to tariff pressures, currency fluctuations and costs related to adjustments in its Porsche product strategy.
Meanwhile, Swiss chocolatier Lindt & Sprüngli reported full-year sales of 5.9 billion euros, marking strong organic growth despite volatile cocoa prices and global economic uncertainty. However, its shares fell sharply during trading, as investors reacted cautiously despite the company’s stronger-than-expected operating profit.
