PARIS: European shares inched higher on Tuesday, but investors refrained from placing large bets ahead of key euro zone data, while energy stocks were the biggest laggard following a drop in global oil prices.
The pan-European STOXX 600 index was up 0.2% after opening flat. The benchmark gauge touched a three-week high in the previous session. All regional bourses were trading in the green, except London’s FTSE 100, which fell 0.5% German producer prices decreased 0.8% on the year in July, in line with forecasts. The German benchmark DAX ticked 0.2% higher.
Swedish shares ticked lower by 0.3% after the country’s central bank cut its key interest rate by quarter of percentage point to 3.5%. Markets were focussed on July’s consumer prices reading from the euro zone at 0900 GMT, for more light on the European Central Bank’s rate path. Economists polled by Reuters expect it to remain steady at 2.6% from last month. Technology stocks boosted the STOXX 600 with a 1.2% jump, led by a 2.5% jump in heavyweight ASML Holdings.
Oil and gas sector weighed the most, dropping 1.5%, as crude prices edged lower on easing geopolitical risks and weak demand from China. European equities are currently in a consolidation phase as investors stayed on the sidelines ahead of the key economic data that is set to drop through the week.
Spotlight this week will remain on the comments by Federal Reserve Chair Jerome Powell at the Jackson Hole conference in Wyoming on Friday.
A slew of Fed officials have signalled their intent for a September rate cut in the last one month and markets expect that Powell will also stay on script when he addresses the central bank’s annual gathering.
“Do expect a dovish tone from Powell, but maybe not dovish enough because many key questions on rates of policy will not be answered,” said Geoffrey Yu, senior EMEA market strategist at BNY. Yu also noted that European equities will only get affected if what’s said at Jackson Hole is much more out of line compared to expectations. Among other movers, BT fell 5.2% after rival media company Sky said it will launch its broadband services on the internet provider CityFibre’s network.
Source: Brecorder
