European shares waver in lead-up to crucial US data
4:33 am Tuesday, September 03rd, 2024
By Shubham Batra
(Reuters) -Europe stocks struggled for direction on Tuesday as investors remained cautious ahead of a raft of economic data in the run-up to the all-important U.S. jobs report on Friday, while German stocks hit all-time highs.
The pan-European STOXX 600 index was flat, with German stocks inching 0.2% higher to hit a record peak, building on the positive momentum on interest rates after inflation eased.
“We saw a little bit of indecision in the decks yesterday, a bit of rebalancing there, but we still have some positive momentum in European stocks,” said Daniela Hathorn, senior market analyst at Capital.com.
“I think there’s going to be a lot of emphasis on this August (U.S. payrolls) data. It might not provide any surprise or any insights, and it may just continue showing the current trend, but I think investors are very wary going into it.”
Rolls-Royce provided the biggest boost to the industrial sector with a 4.4% rise as the British aerospace and defense major sought to recover from its biggest one-day drop this year following news of an engine component failure at Cathay Pacific Airways.
Cathay Pacific said three of the 48 Rolls-Royce-powered planes it had inspected had gone through successful repairs and all of the jets were expected to resume operation by Saturday.
Investors will closely monitor comments from European Central Bank policymakers Claudia Buch, Jose Manuel Campa and Kerstin af Jochnick through the day for any signals on the central bank’s next move on Sep. 12.
Money markets currently see a full chance of a 25 basis point rate cut by the ECB, while penciling in a total easing of 57 bps until the end of 2024.
U.S. ISM manufacturing reading for August is due at 1000 ET (1400 GMT).
Traders feel that stocks will struggle to find momentum before the U.S. non-farm payrolls data on Friday that will be crucial for the quantum of the Federal Reserve’s rate cut in September.
Energy shares slid 0.5% after brent oil prices fell as sluggish economic growth in China, the world’s biggest crude importer, increased worries about demand, overshadowing the impact of the halt of production and exports from Libya.
Among other movers, Partners Group slipped 7.2% to the bottom of the STOXX 600 after it missed earnings expectations in the first half of the financial year.
Ashtead Group was up 3.6% as it kept its annual profit forecast after reporting a drop in quarterly earnings, reassuring investors as it also named a new finance chief to replace Michael Pratt, who is retiring next year.
(Reporting by Shubham Batra in Bengaluru; Editing by Mrigank Dhaniwala)
