European stock market opens flat, market awaits the outcome of the "triple major test"
After rebounding on Monday, the European stock market showed a flat performance on Tuesday as investors remained cautious ahead of key US inflation data and the European Central Bank policy meeting. The pan-European Stoxx 600 index remained stable, with weak performance in cyclical industries and tech stocks leading the gains. Market concerns about an economic recession are growing, with expectations that the European Central Bank may cut interest rates on Thursday. Ulrich Urbahn of Berenberg Bank commented that market volatility will remain high as investors await more certainty
According to the VESYNC financial APP, after experiencing a rebound on Monday, the European stock market performed flat on Tuesday, with investors remaining cautious ahead of the U.S. presidential debate, key U.S. inflation data, and the European Central Bank policy meeting. As of the time of publication, the pan-European STOXX 600 index remained almost unchanged. The healthcare and automotive industries performed poorly, while the technology sector led the gains.
It is understood that after last month's rebound, the European benchmark index fell again in September, as weak economic data reignited concerns about an economic recession. Since the end of May, industries closely related to the economic cycle (i.e., cyclical industries) have consistently lagged behind defensive industries.
The economic outlook indicates that cyclical stocks may face further downside risks. Both the U.S. manufacturing PMI and the European manufacturing PMI remain in deep contraction territory, with no clear signs of improvement.
It is reported that later this week, the U.S. presidential debate, U.S. consumer price index report, and the European Central Bank policy meeting could all impact market sentiment. The market generally expects the European Central Bank to cut interest rates for the second time this year at Thursday's meeting.
Ulrich Urbahn, Head of Multi-Asset Strategy and Research at Berenberg Bank, stated, "We expect market volatility to remain at elevated levels until the U.S. presidential election, as investors prefer to wait for more certainty before making significant investment decisions." He added that there is "some unexpected potential" in the European Central Bank's signals on future rate decisions.
