The DAX chart of the German stock index is pictured at the stock exchange in Frankfurt, Germany September 18, 2023. REUTERS/Staff acquire license rights
Sept 19 (Reuters) – European stocks edged higher on Tuesday in choppy trading as cautious investors awaited a series of central bank decisions this week, while Germany’s DAX lagged regional peers on weak industrial values weighing.
The pan-European STOXX 600 index (.STOXX) rose 0.2% at 0817 GMT, while Germany’s DAX (.GDAXI) was flat.
Energy stocks (.SXEP) gained 0.8% as crude prices rose on supply gap concerns.
Financial sectors such as insurance (.SXIP) and financial services (.SXFP) climbed 0.7% and 0.8%, respectively.
UBS (UBSG.S) rose 0.5% after its CEO said momentum was mostly positive at the Swiss bank, which manages $5.5 trillion in assets since its merger with former rival Credit Suisse earlier this year.
Capping their gains on the STOXX 600, industrial stocks (.SXNP) extended their losses for a second consecutive session, with Germany’s Deutsche Post (DHLn.DE) falling 2.6%. Rate-sensitive technology stocks (.SX8P) fell for their third straight session.
Eurozone inflation figures for August will be closely watched later today, after the European Central Bank (ECB) raised rates last week to a record 4%.
Investors remained cautious ahead of interest rate decisions from major central banks this week, including the U.S. Federal Reserve on Wednesday and the Bank of England, Swiss National Bank, Riksbank and Norwegian Bank on Thursday.
Adding to the sense of nervousness, the yield on the euro zone’s benchmark 10-year Bund on Tuesday approached its highest level in more than 12 years after ECB officials reiterated that rates would remain at current levels for an extended period of time.
“As the ECB sets policy for 20 countries, divergent views towards the end of the cycle are not surprising,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
“Last week’s ECB rate hike reduces the premium offered by the US, and we do not expect a rate cut from the Eurozone central bank until at least June of the year next.”
Retail results were mixed, with Kingfisher (KGF.L) falling 6% to the bottom of the STOXX 600 index after the European home improvement retailer cut its annual profit forecast.
British online supermarket Ocado Retail maintained its full-year outlook, raising parent companies Ocado Group (OCDO.L) and Marks & Spencer (MKS.L) by 3.0% and 1.3%. , respectively.
Meanwhile, travel group TUI (TUI1n.DE) climbed 6.4% after confirming its outlook for the full financial year 2023, citing strong bookings over the summer and next winter season.
Swedish paper and packaging company Billerud (BILL.ST) gained 7.9% as Jefferies raised its rating to “buy.”
Reporting by Bansari Mayur Kamdar in Bangalore; Editing by Rashmi Aich and Janane Venkatraman
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