European Record, Consolidation Alarm Sounds
European stocks fluctuated slightly near record levels on Tuesday, as investors awaited the release of US inflation data, which could determine the market's next direction. The Stoxx Europe 600 index was virtually unchanged in London morning. Retail and technology sectors showed strength, while automotive and construction stocks lagged.
One highlight came from Orsted A/S, which rose around 4.7%. This rise came after a US judge ruled that the renewable energy company could continue construction on a Rhode Island offshore wind farm project, while still challenging the government's latest stop-work order.
Overall, the start of this year has been a "hot" period for European markets after a strong rally throughout 2025. But now, signs are emerging that the market has risen too fast: the Stoxx 600 is said to be at its highest overbought level in 10 years. The 14-day Relative Strength Index (RSI) has even breached the 80 level, which is often interpreted as a signal that the market needs consolidation or a pause before continuing to rise.
After the inflation data, the market's focus will shift to the corporate earnings season. In the US, JPMorgan Chase is one of the opening acts for the banking sector's earnings season. Meanwhile, market participants are also awaiting the release of US core inflation, which is expected to rise 2.7% year-on-year in December—a figure that could alter interest rate expectations and influence the direction of global stocks.
Source: Newsmaker.id
