(Bloomberg) — European stocks gave up small gains on Tuesday as investors shied away from big investments ahead of the release of U.S. inflation data and Nvidia Corp. earnings later this week.
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The Stoxx 600 index was unchanged at 11:25 a.m. in London, having risen about 0.4 percent earlier. The automotive and mining sectors fared better, while retail lagged.
Among individual stocks, Associated British Foods Plc fell after Deutsche Bank downgraded its rating to “sell” from “hold.” Daimler Truck Holding AG fell after Goldman Sachs downgraded its rating to “neutral.” Bunzl Plc jumped after the distribution group raised its full-year profit forecast.
The European stock index is approaching a record high due to dovish signals from the US Federal Reserve regarding the interest rate outlook. Nevertheless, investors remain defensive. Healthcare stocks and insurance are among the favored sectors, while automobiles and mining companies are lagging behind.
The focus this week is on the US personal consumption expenditure index, which will be released on Friday and will provide further clues as to how much the Fed is likely to cut interest rates. Investors will also be watching Nvidia’s quarterly results on Wednesday to gauge the strength of sectors related to artificial intelligence.
“In a week of weak data on the macro front, European equities are likely to be driven more than usual by developments in the US,” said Joachim Klement, strategist at Panmure Liberum. “We remain optimistic that Nvidia will beat expectations, but any sign of weakness in the numbers could lead to setbacks not only for US technology stocks but also for European technology companies.”
The French CAC 40 index remained little changed. French President Emmanuel Macron will continue consultations on the appointment of an effective prime minister after ruling out a government led by left-wing candidate Lucie Castets in favor of a possible centrist coalition.
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– With support from Jan-Patrick Barnert.
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