European stocks closed firmly higher on Tuesday, trimming losses from last week with support from a respite in sovereign bonds despite the prolonged impasse between the US and Iran. The Euro STOXX 50 added 1.2% to 6,100 and the STOXX Europe 600 gained 0.7% to 625. The tech sector led the gains amid news that SK Hynix will double its wafer capacity and bullish signals from the largest companies. ASML surged 5% and Infineon gained 9.5%. Also, STMicroelectronics surged 15% after raising its earnings target and Prosus surged 9.4% after Tencent announced it was testing a new AI agent. Banks also closed sharply higher to track the rebound in sovereign bonds, with UniCredit, BNP Paribas, and Deutsche Bank adding more than 1.6%. Meanwhile, Eurozone's preliminary inflation data showed the headline rate rose to 3.2% as expected, while the core inflation rose slightly more than expected to 2.5%, consolidating bets of a rate hike by the ECB next week.