Investing.com - European equity indices edged higher Tuesday, boosted by a Chinese rate cut as well as the possibility of peace talks to end the Ukraine conflict.

At 03:05 ET (07:05 GMT), the DAX index in Germany climbed 0.2%, the CAC 40 in France gained 0.2% and the FTSE 100 in the U.K. rose 0.3%.

China cuts interest rates

European stock indices have received a solid lead in from gains in Asia overnight, boosted by the decision of the People’s Bank of China to cut its benchmark loan prime rate , bringing the rate further into record low territory.

The cut signaled that Beijing was open to doling out more monetary stimulus to support the world’s second-largest economy, and a major export market for a number of Europe’s latest companies.

The Reserve Bank of Australia also cut interest rates earlier Tuesday, flagging increasing risks to the Australian economy from global trade uncertainty.

The European Central Bank next meets in June, and is widely expected to cut interest rates once more, having eased monetary policy seven times in the past year.

Inflation doesn’t look to be an issue stopping the ECB from easing further, if German factory prices are any guide.

The German producer price index fell 0.6% on the month in April, data showed earlier Tuesday, resulting in a drop of 0.9% on an annual basis.

Ukraine peace talks look likely

Hopes are growing that a peace deal between Ukraine and Russia can be agreed, ending the over three-year conflict.

President Volodymyr Zelenskiy said on Monday that Kyiv and its partners were considering arranging a high-level meeting between Ukraine, Russia, the United States, European Union countries and Britain as part of a push to end Moscow’s war in Ukraine.

"Negotiations between Russia and Ukraine will begin immediately," U.S. President Donald Trump said in a Truth Social post following his call with Russian President Vladimir Putin, on Monday.

Delegates from the warring countries met last week in Istanbul for the first time since 2022, though they failed to agree to a truce.

More trade deals coming?

Investors are looking for more trade deals to keep stock markets powering ahead, after the deal between China and the U.S. was positively received, and with the clock ticking on the United States’ 90-day pause.

U.S. President Donald Trump’s so-called reciprocal tariffs will kick in again in early July.

Trade talks between Japan and the U.S. are set to take place later this week – marking the third round of high-level talks between the nations, Japan’s Kyodo News agency reported on Tuesday.

The European Union has also begun serious trade talks with the U.S. in order to head off the worst of the Trump administration’s tariffs.

Swiss Life post strong Q1 growth

Back in Europe, Swiss Life (SIX: SLHN ) posted strong growth in the first quarter of 2025 with higher premiums and fee income, as the insurer expanded its business across key European markets.

Vodafone Group (LON: VOD ) said it expects flat profit for the current fiscal year as the British telecom company continues its efforts to turn around its German business.

Greggs (LON: GRG ) reported a jump in its sales for the first 20 weeks of 2025, with the British bakery chain’s performance strengthening in the most recent 11 weeks, supported by better trading conditions.

Crude slips lower

Oil prices traded in a muted manner Tuesday as traders digested signs of a faltering U.S.-Iran nuclear deal, while the prospects of negotiations toward a Russia-Ukraine ceasefire weighed on the sentiment.

At 03:05 ET, Brent futures gained 0.1% to $65.54 a barrel, and U.S. West Texas Intermediate crude futures rose 0.1% to $62.21 a barrel.

Iran on Monday reaffirmed that its uranium enrichment program is “absolutely non-negotiable,” a stance that continues to be a major sticking point in nuclear negotiations with the United States.

A successful agreement could lead to the easing of sanctions and an increase in Iranian oil exports, impacting global energy markets.

Investors are also monitoring the conflict in UKraine closely, as a resolution could impact energy markets and geopolitical stability.