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 per cent higher, boosted by a 1.7 per cent jump in basic resources, recovering from Monday’s four-month low tracking higher metal prices.
Tech, too, jumped 1 per cent to its highest level since December 2000.
Germany’s benchmark DAX advanced 0.8 per cent, outperforming its regional peers, gaining 4.8 per cent so far in 2024. The Stoxx 600 has risen nearly 4 per cent so far this year, after a near 13 per cent 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 stabilise at a low level in March, while France’s consumer confidence declined in February as inflation worries weighed again.
Healthcare index slipped 0.1 per cent, with blockbuster obesity drug Wegovy maker Novo Nordisk shedding as much as 4.5 per cent intraday, but closing 1.2 per cent 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 per cent to top the Stoxx 600, bouncing back from Monday’s slide.
GTT jumped 8.9 per cent after the French engineering company reported better-than-expected full-year results, while French conglomerate Bouygues gained 8 per cent following a 19 per cent pro forma rise in annual operating profit.
Puma lost 4.1 per cent as the German sportswear brand expects a weak first half of the year in a challenging market.
Zealand Pharma fell 4.4 per cent following 2023 results, after jumping 36 per cent on Monday.
French testing company Eurofins Scientific dropped 6.7 per cent after an adjusted earnings-per-share miss and a “weak” free cash flow.
SEB dropped 7.6 per cent 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 per cent beat expectations, in-line with the typical 54 per cent beat rate, as per LSEG data. REUTERS
