July 15 (Reuters) - European shares ended Wednesday with modest gains, as a strong rise in luxury goods stocks offset weakness in telecoms and technology shares, but escalating tensions in the Middle East continued to weigh on investor sentiment.

The pan-European STOXX 600 index rose 0.12 percent to 642.84 points.

Investors had hoped that the start of earnings season this week would shift attention away from geopolitical issues and back to the basic financial, operational, and strategic indicators that determine a company's long-term health, stability, and profitability, providing fresh impetus for stocks.

But the Stoxx 600 has risen only 0.27 percent so far this week, and ASML closed down 0.41 percent, erasing earlier gains despite raising its sales forecast for 2026.

Although many major companies have yet to announce their results, the limited optimism that prevailed in the markets today illustrates the significant obstacle that companies must overcome to attract investors to stocks, especially with the ongoing conflict between the United States and Iran.

Michael Metcalfe, head of macro strategy at State Street, said, "While there has been some good news on earnings and some stocks in Europe, the bigger picture is that we may be a little more cautious, due to renewed geopolitical risks."

The United States launched a new wave of strikes against Iran, while Tehran threatened to halt more regional energy exports.

The conflict has created uncertainty about interest rates, with central banks around the world trying to assess the potential impact of the war on inflation.

European Central Bank policymakers today called for caution in setting interest rates, but stopped short of calling for a tighter monetary policy.

Germany’s DAX index fell 0.59 percent, weighed down by a 6.28 percent drop in shares of Infineon Technologies.

Shares of technology companies fell 0.53 percent, while shares of luxury goods companies, the worst performing index this year, rose 3.22 percent.

Shares of Richemont jumped 6.68 percent after it reported better-than-expected first-quarter results, boosted by booming demand for its jewelry in Asia and the Americas.

But shares of software developer Nagaro fell 1.82 percent after Germany’s financial watchdog launched an executive review of the company’s consolidated financial statements for 2022.

Shares in Swedish retailer Oxfood plunged 14.89 percent after it reported quarterly results that fell short of expectations.