London (AFP) – European stocks rose Tuesday after data showed that the eurozone dodged recession at the end of last year but Wall Street wavered as investors await fresh interest-rate signals from the Federal Reserve.
The Paris CAC 40 closed up 0.5 percent after hitting a new intraday high of 7,686.03 points.
The Frankfurt DAX rose 0.2 percent even as data confirmed that the German economy, Europe’s largest, shrank in the fourth quarter of last year.
London’s FTSE 100 index of blue-chip stocks gained 0.4 percent.
Official figures showed that the eurozone economy avoided a technical recession in the second half of 2023.
While it stagnated in the final three months of the year, it was better than forecast by analysts who had expected a small contraction.
The French economy stagnated at the end of the year but Spain, Italy and Portugal posted growth over the same period.
“We are seeing markets react to a rather surprising raft of eurozone growth data that has seen stronger-than-expected Spanish, Italian, and eurozone GDP for the fourth quarter,” said Joshua Mahony, chief market analyst at Scope Markets.
The single-currency area’s economy has been hit by many factors including higher interest rates, a cost-of-living crisis hitting household spending, and weakening global demand.
Wall Street’s main stock indices wobbled in morning trading on the first day of the Fed’s two-day policy meeting, with investors also awaiting earnings reports from leading tech companies.
The US central bank is expected to keep borrowing costs unchanged but investors will listen closely to Fed chairman Jerome Powell’s press conference for any indications as to when it may start cutting rates.
The Fed hiked rates in efforts to combat inflation, which has slowed but remains above the central bank’s two-percent target.
“Investors expect the Fed to cut the rates from May and the dollar to lose value this year.Yet the Fed’s path to rate cuts may not be as swift as many believe, if inflation numbers start looking bad again,” said Ipek Ozkardeskaya, senior analyst at Swissquote bank.
The Dow managed to push into positive territory after data showed that US consumer confidence beat expectations in January to reach its highest level since December 2021, with the public more optimistic than at any point since the Fed began raising interest rates.
Focus also will be on earnings, with tech titans Microsoft and Google parent Alphabet due to report after markets close on Tuesday.
Amazon and Apple will publish their results on Thursday, with Facebook and Instagram owner Meta up next on Friday.
Shares in UPS tumbled around eight percent after the parcel delivery service said it would cut about 12,000 jobs worldwide, shortly after reporting drops in average daily volumes, both in its domestic and international business segments, that dragged down its revenues.
In Asia, Hong Kong and Shanghai indices fell heavily as an order to liquidate indebted property developer Evergrande fanned fears about China’s fragile economy.
Oil prices rose after Saudi Arabia ordered its energy giant Aramco to maintain its oil production capacity at 12 million barrels per day, abandoning a planned increase.
– Key figures around 1630 GMT –
New York – Dow: UP less than 0.1 at 38,356.34 points
New York – S&P 500: FLAT at 4,926.03
New York – Nasdaq Composite: DOWN 0.4 percent at 15,566.56
London – FTSE 100: UP 0.4 percent at 7,666.31 (close)
Paris – CAC 40: UP 0.5 percent at 7,677.47 (close)
Frankfurt – DAX: UP 0.2 percent at 16,972.34 (close)
EURO STOXX 50: UP 0.5 percent at 4,662.70 (close)
Tokyo – Nikkei 225: UP 0.1 percent at 36,065.86 (close)
Hong Kong – Hang Seng Index: DOWN 2.3 percent at 15,703.45 (close)
Shanghai – Composite: DOWN 1.8 percent at 2,830.53 (close)
Euro/dollar: UP at $1.0840 from $1.0838 on Monday
Euro/pound: UP at 85.59 pence from 85.24 pence
Pound/dollar: DOWN at $1.2666 from $1.2710
Dollar/yen: UP at 147.80 yen from 147.48 yen
West Texas Intermediate: UP 1.4 percent at $77.82 per barrel
Brent North Sea Crude: UP 0.7 percent at $82.94 per barrel
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