European shares started August on a positive note on Monday, supported by easing geopolitical concerns after U.S. President Donald Trump said talks with Iran were scheduled later in the day, raising hopes of a diplomatic breakthrough that could help cool oil prices, Reuters reported.The pan-European STOXX 600 index was up 0.4% at 651.88 by 7:09 GMT, with gains in travel and leisure stocks offsetting weakness in the energy sector.According to Reuters, investor sentiment improved after Trump signalled a preference for diplomacy over immediate military action against Iran. The development triggered a sharp decline in crude oil prices, with oil futures falling nearly 5.9% on expectations that tensions in the Middle East could ease and the Strait of Hormuz could remain open to global shipping.Energy stocks were among the biggest laggards, declining 2% as lower oil prices weighed on the sector. In contrast, travel and leisure shares climbed 2.1%, benefiting from the prospect of lower fuel costs and improved travel demand.The STOXX 600 had gained more than 1% in July, supported by a strong corporate earnings season that helped offset investor concerns stemming from the U.S.-Iran conflict, Reuters reported. The earlier surge in geopolitical tensions had pushed Brent crude prices above $90 per barrel, raising concerns over inflation and economic growth.Europe remains particularly vulnerable to rising energy costs because of its heavy dependence on imported oil, making any decline in crude prices a positive development for regional markets.Among individual stocks, Italian cable maker Prysmian advanced 1.5% after announcing an agreement to acquire U.S.-based electrical products manufacturer Atkore for $95 per share in cash. Reuters reported that the deal values Atkore at an enterprise value of about $3.8 billion.Meanwhile, pharmaceutical giant AstraZeneca dropped 7% following reports of a possible combination involving the European drugmaker and U.S.-based Bristol Myers Squibb, weighing on the healthcare sector.