European stocks hit 23-month high, supported by energy sector

Europe’s benchmark stock index hit its highest level in nearly two years on Tuesday, amid firm hopes among investors at the beginning of 2024 that major central banks are likely to finally adopt interest rate cuts, and energy sector stocks led the gains.

According to Reuters, the European Stoxx 600 index rose 0.3% by 0811 GMT, recording the highest level in 23 months after a long weekend marking the beginning of the year.

Expectations of monetary easing led to a 12.7 percent jump for the benchmark index in 2023, as it recovered almost completely from a 12.9 percent drop in the previous year after major central banks quickly raised interest rates to combat rising inflation.

Key economic data remains at the forefront of investors’ minds, including the monthly Eurozone PMI reading due later on Tuesday and the Producer Price Index on Friday. On the other side across the Atlantic, US non-farm payrolls data for December will also be analyzed for indications about monetary policy.

The energy stock index jumped 1.4%, supported by a rise in oil prices, while the shares of ASML, which produces chip manufacturing equipment, fell 1.4% after the Dutch government partially canceled an export license to ship some chip-making equipment to China.

Danish Maersk shares jumped 4% to take the lead on the European STOXX 600 index. The company still plans to operate more than 30 container ships through the Suez Canal and the Red Sea.