Europe close: Stocks end mixed ahead of US CPI data, ECB decision

(Sharecast News) - European shares ended on a mixed note on Tuesday as investors digested the latest reading on German investor sentiment. In the background, rising energy quotes sapped risk appetite.

The pan-European Stoxx 600 index drifted lower by 0.18% to 455.40, while Germany's DAX was down 0.54% to 15,715.53.

Periphery stocks fared better with the likes of Italy's FTSE Mib up by 0.21% to 28,584.58.

Front-dated Brent crude oil was up by 1.5% to $92.17 a barrel on the ICE.

"Floods in Libya have led to oil supply disruptions with its price surging to 10-month highs amid expectations of another US crude inventory drop," said Axel Rudolph, senior market analyst at IG.

"As market players anticipate US inflation data for August and the ECB's interest rate decision later this week, the US dollar has resumed its role as a safe haven currency with it resuming its ascent after eight consecutive weeks of gains, its longest win streak since 2014."

Closer to home, investors were mulling the latest ZEW survey, which showed that investor sentiment unexpectedly improved in September.

The ZEW investor expectations index rose to -11.4 from -12.3 in August, coming in comfortably above consensus expectations of -15.0. However, the current conditions index fell to -79.4 in September from -71.3 the month before. This was below expectations of -75.0 and marked a three-year low.

ZEW president Achim Wambach said: "The financial market experts assess the current economic situation in Germany even more pessimistically than in August 2023. This development puts into perspective the slightly increased expectations regarding the economic situation over the next six months.

"The more positive economic expectations for Germany are accompanied by a significantly more optimistic outlook regarding developments on the international stock markets. This is at least partly due to the fact that the proportion of respondents who expect stable interest rates in the euro area and the USA has continued to rise.

"In addition, the experts expect a further easing of interest rate policy in China."

In other economic news, German wholesale prices fell for the fifth month in a row in August due to lower prices for mineral oil products, data from the federal statistics office showed.

Wholesale prices declined by 2.7% in August compared to the same month last year.

On the equities front, Smurfit Kappa shares tumbled after the company said it had agreed to merge with US rival WestRock in a deal that will create a $20bn packaging giant.