PARIS: Europe’s benchmark stock index inched up on Tuesday, with Germany’s DAX hitting a record high, while investors awaited this week’s inflation data that could shed some light on when interest rate cuts might commence this year.
The pan-European STOXX 600 closed 0.2% higher, boosted by a 1.7% jump in basic resources, recovering from Monday’s four-month low tracking higher metal prices.
Tech, too, jumped 1% to its highest level since December 2000.
Germany’s benchmark DAX advanced 0.8%, outperforming its regional peers, gaining 4.8% so far in 2024. The STOXX 600 has risen nearly 4% so far this year, after a near 13% jump in 2023 on growing bets of imminent rate cuts.
The recent market rally has lost some steam with investors bracing for crucial euro zone and US inflation data, after a surge in artificial intelligence-driven optimism propelled the STOXX 600 to a record high last week.
“Markets have been over optimistic about rate cuts... but considering the way inflation and economy are going, I’m not going to dispute the market’s assessment of a June cut at this point,” said Steve Sosnick, chief strategist at Interactive Brokers.
European Central Bank member and Riksbank Governor Erik Thedeen did not dismiss the possibility of a policy rate cut in the first half of 2024, considering falling inflation.
Meanwhile, a survey showed German consumer sentiment is expected to stabilize at a low level in March, while France’s consumer confidence declined in February as inflation worries weighed again.
Healthcare index slipped 0.1%, with blockbuster obesity drug Wegovy maker Novo Nordisk shedding as much as 4.5% intraday, but closing 1.2% lower.
US-based Viking Therapeutics’ experimental obesity drug helped patients achieve “significant” weight loss in a mid-stage study.
German meal-kit delivery HelloFresh jumped 12.9% to top the STOXX 600, bouncing back from Monday’s slide.
GTT jumped 8.9% after the French engineering company reported better-than-expected full-year results, while French conglomerate Bouygues gained 8% following a 19% pro forma rise in annual operating profit.
Puma lost 4.1% as the German sportswear brand expects a weak first half of the year in a challenging market.
Zealand Pharma fell 4.4% following 2023 results, after jumping 36% on Monday.
French testing company Eurofins Scientific dropped 6.7% after an adjusted earnings-per-share miss and a “weak” free cash flow.
SEB dropped 7.6% after Peugeot Invest sold its stake in the household equipment manufacturer.
Out of the STOXX 600 companies that have reported fourth-quarter earnings, 53.5% beat expectations, in-line with the typical 54% beat rate, as per LSEG data.
Comments
Comments are closed.