The pan-European index closed 1% higher at 619.95 points

European shares ​closed at their highest level in a month on Tuesday, with investors welcoming ‌signs of a resumption of Middle East peace talks, even as LVMH and other companies warned of fallout from the war.

The pan-European index closed 1% higher at 619.95 points, while other regional bourses also rose. Germany’s DAX, Spain’s IBEX 35 and France’s ​CAC 40 advanced more than 1% each.

Signs of Iran-U.S. diplomatic talks were sufficient to trigger a rebound ​in stocks, while oil prices retreated below $100 a barrel.

Meanwhile, the International Monetary Fund cut Germany’s ⁠growth forecasts for this year and next, in its largest downgrade among big euro zone economies.

European ​dependence on oil imports has left it vulnerable.

Investors meanwhile seem to have already decided that the European economy and its companies will fare worse than the US in face of the war and higher energy prices, Kristina Hooper, chief market strategist at Man Group, said ​in a note.

Industrials and euro zone banks boosted the index, rising 1.6% and 2.3%, respectively.

Tech shares moved higher, with Dutch ​semiconductor stocks BE Semiconductor advancing 5.3% while ASML and ASMI were up 2% and 1.4%, respectively. ASML will report its ⁠quarterly results on Wednesday.

Meanwhile, the energy index shed 1.5% with heavyweights Shell and BP down nearly 2.5% each.

Imperial Brands declined 4.8% after the maker of Davidoff cigarettes said the impact of the Middle Eastern war could disrupt second-half performance.

French luxury brand LVMH said the Iran war shaved at least 1% ​from group sales in the ​last quarter due ⁠to lower spending in the Gulf. Shares ended flat after paring early losses.