European stocks begin the new year with the highest level in 23 months

On Tuesday, Europe’s benchmark stock index reached its highest level in nearly two years, driven by optimistic expectations among investors at the beginning of 2024 that major central banks are likely to adopt interest rate cuts. Energy sector stocks led the gains in the European STOXX 600 index, which rose 0.3 percent by 0811 GMT, marking its highest level in 23 months after a long weekend to mark the beginning of the year.

The anticipation of monetary easing contributed to a 12.7 percent increase in the benchmark index throughout 2023. This recovery nearly offset the 12.9 percent fall observed the previous year when major central banks swiftly raised interest rates to counter rising inflation.

Investors are keeping a close eye on key economic data, including the monthly Eurozone PMI reading scheduled for later Tuesday and the Producer Price Index on Friday. Additionally, the US non-farm payrolls data for December, set to be released, will be closely analyzed for indications regarding monetary policy.

The energy stock index recorded a significant 1.4 percent jump, supported by higher oil prices.

However, ASML shares, a producer of chip manufacturing equipment, declined by 1.4 percent after the Dutch government partially canceled an export license for shipping some chip-making equipment to China.

Danish Maersk shares took the lead on the European STOXX 600 index, surging by four percent. The company, known for shipping and logistics, plans to continue operating more than 30 container ships through the Suez Canal and the Red Sea.