By Tharuniyaa Lakshmi and Purvi Agarwal
July 21 (Reuters) - European shares edged higher on Tuesday after kicking off the week on the back foot, as reports of U.S.-Iran mediation efforts pushed oil prices lower, while investors assessed a fresh batch of corporate earnings.
Oil prices eased from one-month highs after reports of diplomatic efforts between the United States and Iran. However, concerns over energy supply disruption lingered after Yemen's Iran-aligned Houthis announced a blockade of Saudi
Arabia on Monday. [O/R]
The pan-European STOXX 600 index rose 0.1% to 640.61 points by 0831 GMT.
Technology stocks rose 0.9%, the most on the index, led by ASMI and ASML, which gained 2.1% and 2.8%, respectively.
Earnings from major technology companies such as Alphabet in the U.S. will be on watch this week for clues on the sustainability of AI-related demand and whether their lofty valuations can be justified.
"We have seen these ebbs and flows in sentiment... that highlights the sort of the nervousness that there is surrounding tech, particularly the AI and chip trade," said Fiona Cincotta, senior market analyst at City Index.
"But if we do see another solid season, that could actually be a catalyst for the next leg higher in tech stocks."
Miners climbed 0.6%, tracking an uptick in copper and gold prices. Swedish miner Boliden, down 6.9%, limited gains after a weaker-than-expected quarterly adjusted operating profit.
On the flip side, media and personal and household goods sectors were the laggards, down 1.1% and 0.7%, respectively.
Wienerberger shares fell 6.5% to their lowest since October 2022, after the building materials maker issued a full-year profit warning, citing deterioration in new-build activity.
Cincotta said uncertainty stemming from escalating U.S.-Iran tensions could weigh on corporate outlook.
Swiss bank Julius Baer dipped 4.2% despite reporting stronger-than-expected first-half net new money inflows, while lift maker Schindler dropped 5.1% after its quarterly sales missed market expectations.
Novartis shares gained 2.2% after the drugmaker beat second-quarter core operating profit estimates.
This week, focus will also be on commentary from European Central Bank policymakers at their monetary policy meeting where they are expected to hold interest rates steady.
Market participants are pricing in at least one 25-basis-point hike by end-2026, according to LSEG-compiled data.
In Britain, new Prime Minister Andy Burnham appointed former defence secretary John Healey as finance minister, just weeks after he resigned from the previous government with a stinging rebuke of how the Treasury had fallen short on defence spending.
(Reporting by Tharuniyaa Lakshmi and Purvi Agarwal in Bengaluru; Editing by Nivedita Bhattacharjee and Mrigank Dhaniwala)
