European stocks fell on Tuesday as a possible strengthening of wage settlements in the euro zone clouded bets of an early cut in interest rates, while China’s decision to cut mortgage interest rates failed to make a good impression on the markets.
The European Stoxx 600 index fell 0.1 percent during trading. In the previous session, the index recorded its highest levels in more than two years.
The market’s focus will be on the Eurozone’s negotiated wages data in the fourth quarter after the European Central Bank identified wage adjustments as the most important variable in determining whether it can start cutting interest rates.
Basic resources shares fell 1.8 percent amid a decline in copper prices on the back of a strong dollar, while traders evaluated the prospects for demand in China after a cut in the mortgage interest rate for consumers failed to lift morale.
On the corporate side, Air Liquide shares rose 6.2 percent to the top of the STOXX 600 after the French industrial gases company announced better-than-expected operating profits for the full year and said it had already reached its target profit margin for 2025.
Japan
The main Japanese stock index was unable to continue rising, remaining one percent below the maximum peak recorded in more than three decades, amid traders’ anxiety before the release of Nvidia’s earnings.
China’s unexpectedly large interest rate cut gave Japanese stocks a boost in the morning session but proved short-lived, with the Nikkei index closing down 0.28 percent at 38,363.61 points.
The Nikkei is on the cusp of breaking its all-time high of 38,957.44, set on the last trading day of 1989 at the height of Japan’s bubble economy. On Friday, the main index rose to 38,865.06 before falling at the close.
Japan’s chip sector giants were the driving force behind the Nikkei’s nearly 15 percent rise this year, easily outperforming its major peers, including the S&P 500 and the technology-focused Nasdaq, which each gained about five percent.
2024-02-20 10:22:32
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