European shares opened higher on Tuesday and were on track for their biggest quarterly gain in five years, buoyed by artificial intelligence and signs of easing geopolitical tensions in the Middle East.

The pan-European STOXX 600 index was up 0.6% at 639.77 points by 0804 GMT. The benchmark index is poised for its third straight monthly gain, and rose 9.7% for the quarter, its strongest quarterly performance since October 2020.

Technology stocks rose 1.7% and were set for their strongest quarterly gain since October 2001, underscoring strong demand for AI infrastructure. The sector is also on track to outperform its Wall Street peers this month and quarter.

Lithography giant ASML rose 3.33% on Tuesday, while chipmakers STMicroelectronics and Infineon gained 3% and 2.7%, respectively.

Shares of Siemens Energy rose 5% on Monday after the AI-equipment maker reiterated strong demand trends on a pre-close quarterly earnings call.

Signs of easing Middle East tensions have also been a key driver this quarter, as oil prices, a key source for energy-starved Europe, slipped to pre-Iran-war levels.

Abivax jumped more than 20% after the drugmaker reported positive topline results for its obefazimod study. The broader healthcare sector rose 0.9%.