LONDON: Europe’s STOXX 600 index slipped in cautious trading on Tuesday as a fall in technology and chemicals stocks offset a rally in commodity-linked shares spurred by hopes that Beijing could ease COVID-19 curbs following recent protests.
The pan-European index closed a volatile session 0.1% lower after having risen up to 0.53%.
China issued a notice to ramp up COVID-19 vaccinations for the elderly as a senior health official said public complaints about the country’s pandemic-related curbs stem from overzealous implementation rather than from the measures themselves.
European miners and oil majors gained 2.7% and 1.8% respectively, tracking metal and crude prices, while technology and chemical stocks declined 1.2% and 1.7%.
The rally in commodity-linked shares and banks also helped the London FTSE 100 outperform indexes in Paris and Frankfurt.
“(There) is cause for optimism because there wasn’t an immediate clampdown (in China),” said Danni Hewson, financial analyst at AJ Bell.
Investors also exercised caution ahead of a slew of economic data due later this week, including eurozone inflation on Wednesday and a US jobs report on Friday.
Data on Tuesday showed price pressures in Spain and Germany were easing considerably, while a separate survey said inflation expectations among consumers and business in eurozone fell sharply in November from October.
“We reckon that the lower-than-expected November print for the (German CPI inflation rate) can be largely attributed to the unexpected drop in the CPI energy price component (and not ebbing core inflation dynamics),” Deutsche Bank senior economist Sebastian Becker wrote in a note.
“Core inflation dynamics might remain strong in the foreseeable future as companies might still have to pass over significant parts of their higher input costs to their customers.” Flash euro zone inflation figures for November are expected to show price rises edging down to 10.4% year-on-year from a record 10.6%.
The STOXX 600 is on course to end November higher, boosted by recent optimism that central banks might soften their stance on monetary policy tightening in coming months.
Among other stocks, ASM International added 2.9% after the Dutch semiconductor supplier said it now anticipates a smaller fall in fourth-quarter China sales due to US export restrictions.
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