European markets had a strong start in the new year as the Stoxx 600 index, the regional benchmark, surged to its highest level in almost two years. At 10:15 a.m. in London on Tuesday, the index was up 0.23%, slightly below earlier gains that had propelled it to its highest level since January 20, 2022, according to data from the London Stock Exchange Group (LSEG).
Most sectors showed positive momentum, with autos leading the gains at 1.36% and oil and gas stocks following closely at 1.26%. Investors were closely monitoring tensions in the Red Sea and their potential impact on oil prices. However, technology stocks experienced a minor decline of 0.43%.
The euro zone purchasing managers’ index from S&P Global indicated that the bloc may have entered a recession in the third quarter of the previous year. A sustained decline in manufacturing activity led to continued output contraction in December, as reported by Cyrus de la Rubia, the chief economist at Hamburg Commercial Bank.
In the Asia-Pacific region, markets displayed mixed performance, with China stocks declining while Australian markets approached record highs. Official data revealed a further contraction in China’s manufacturing PMI for December 2023, signaling a potential need for additional policy support to revive the economy.
U.S. stock futures remained stable in overnight trading ahead of the new year’s first trading session. This followed a strong 2023 performance that saw the S&P 500 index rise by 24%.
The positive start to the year in European markets reflects investor optimism amid ongoing global economic developments and geopolitical tensions.
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