(Bloomberg) — European stocks erased modest gains on Tuesday as investors refrained from making big bets ahead of U.S. inflation data and Nvidia Inc. earnings later this week.
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The Stoxx 600 index was flat at 11:25 a.m. London time, having risen 0.4% earlier, led by the auto and mining sectors but weaker retail.
Among individual stocks, Associated British Foods fell after Deutsche Bank cut its rating on the stock to sell from hold. Daimler Truck Holdings AG fell after Goldman Sachs cut its rating to neutral. Distribution group Bunzl rose after the company raised its full-year profit outlook.
European stock indexes are nearing record highs after the Federal Reserve gave a dovish signal on the interest rate outlook, but investors remain on the defensive, with health care and insurance stocks the most favored sectors while auto and mining stocks are struggling.
The focus this week will be on Friday's U.S. personal consumption expenditures index, which will provide further clues as to how much the Fed may cut interest rates. Investors will also be watching Nvidia's quarterly results on Wednesday to gauge the strength of the artificial intelligence sector.
“In a week with poor macroeconomic data, European stocks are likely to be more sensitive than usual to developments in the U.S.,” said Joachim Clement, a strategist at Panmure Liberum. “We're optimistic that Nvidia will beat expectations, but any signs of weakness in the numbers could hurt not just U.S. tech stocks, but European tech companies as well.”
France's CAC40 index was little changed. French President Emmanuel Macron is set to continue consultations on appointing a viable prime minister after rejecting a government led by left-wing candidate Lucy Castets and backing the possibility of a centrist coalition government.
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–With assistance from Jan-Patrick Barnert.
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