Tuesday saw the end of a five-day winning run for Europe’s main stock index, which was led by heavyweight energy stocks. Investors were evaluating domestic economic data and getting ready for this week’s central bankers’ meeting in Jackson Hole.
The early gains were erased and the near three-week high level reached earlier in the day was eased as the pan-European STOXX 600 index ended the day 0.5% lower. Additionally, every regional exchange entered negative territory.
Despite a gradual increase in oil prices throughout the day, an early decline in the commodity’s price sent the energy sector plunging 2% to a low that has been reached in more than a week.
According to a Reuters survey, European stock prices will slightly increase by year’s end as a result of interest rate cuts by central banks; however, strategists remained cautious about the outlook for the largest companies in the region.
The blue-chip STOXX50E and the STOXX 600 have both gained more than 7% so far this year, despite a recent wave of volatility that saw the benchmark index fall below the critical 500-point threshold at the beginning of the month due to worries about a possible U.S. recession. Goldilocks thematic and expectations that (the) Fed is closer to pivot is fuelling the risk-on sentiment,” according to OCBC strategists.
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