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08.06.202615:48:29UTC+00European Stocks Recover in Afternoon Trading

European stocks pared early losses to finish modestly higher on Monday, supported by a brief easing of geopolitical tensions in the Middle East after fresh strikes over the weekend. The Euro STOXX 50 rose 0.3% to 6,080, while the STOXX Europe 600 inched above the flatline to close at 622.

Iran declared an end to its military operations in Israel, and Tel Aviv responded by temporarily halting attacks on Iran, allowing talks between Tehran and Washington over an extended ceasefire to resume.

Lower sovereign bond yields in Europe underpinned a rebound in industrials and consumer cyclicals, with Hermes, Ferrari, and Schneider Electric gaining between 1% and 2%. ASML climbed more than 4%, mirroring the recovery in the U.S. semiconductor sector after upbeat comments from Nvidia CEO Jensen Huang.

In contrast, Italian banks closed sharply lower amid renewed uncertainty surrounding mergers and acquisitions in the sector. Intesa Sanpaolo fell 2% after launching a joint bid with BPER Banca for Banca MPS, coming shortly after Banco BPM had put forward its own merger proposal for MPS.

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