European shares start New Year at 23-month high on energy boost

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, Dec 29, 2023. REUTERS/Staff/File photo

Europe’s benchmark stock index hit a near two-year high on Tuesday, as investors entered 2024 with undeterred hopes that major central banks might finally deliver interest rate cuts, with energy stocks leading the charge.

The pan-European STOXX 600 was up 0.3 percent by 0811 GMT, hitting a 23-month high, after a long weekend for New Year Day holiday.

Expectations of softer monetary policy drove a 12.7-percent jump in the benchmark index in 2023, almost fully rebounding from a 12.9 percent slump in the previous year after major central banks delivered rapid rate hikes to conquer spiraling inflation.

READ: Higher forever? Markets see few rate cuts after 2024

Key economic data remain at the top of investors’ radar, including a monthly eurozone PMI reading later in the day and producer prices on Friday. Across the Atlantic, U.S. non-farm payrolls for December will also be crucially parsed for policy cues.

Energy shares jumped 1.4 percent, tracking higher oil prices.

READ: J.P.Morgan sees ‘challenging’ backdrop for stocks in first half of 2024

Chip machine manufacturer ASML lost 1.4 percent after the Dutch government partially revoked an export license for the shipment of some chip-making equipment to China.

Denmark’s Maersk jumped 4 percent to top the STOXX 600. The company still plans to sail more than 30 container vessels through the Suez Canal and the Red Sea.