European shares rise as oil falls

The pan-European STOXX ​600 ended 0.35% higher at 656.48 points, just 0.6% away from its record high hit ⁠earlier this month

European shares rose on Tuesday as investors took comfort from falling oil prices, ‌with gains in heavyweight industrials and healthcare stocks lifting the benchmark.

The pan-European STOXX ​600 ended 0.35% higher at 656.48 points, just 0.6% away from its record high hit ⁠earlier this month.

The healthcare sector led gains with a 1.2% rise. Novo Nordisk added 2.9% after JPMorgan raised its ​price target for the Danish obesity drug maker, citing increased long-term sales forecasts. Peer Zealand Pharma jumped 5.6%.

Industrials gained 1.1%, rising the most in three weeks as Melrose Industries jumped 10.4% after the British aerospace components supplier gave a timeline for resuming full production at GKN Aerospace.

Production was halted in late May at a Los Angeles (U.S.) plant after an overheating tank raised ​fears of an explosion.

Defence and aerospace shares also edged 0.9% 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.

Elsewhere, U.S. treasury secretary’s latest economic measures against Iran had limited impact on markets.

Iran promised to retaliate against the expanded U.S. ​sanctions and said it was confident major trading partners would resist Washington’s campaign.