(Sharecast News) - European equities pared earlier gains by the close on Tuesday after touching record highs, as a rebound in metals prices offset some profit taking following the previous two sessions' sell-off.
The pan-European Stoxx 600 edged up 0.1% to 617.93, while major national indices finished narrowly lower, with Germany's DAX down 0.07% at 24,780.79, France's CAC 40 off 0.02% at 8,179.50 and the UK's FTSE 100 easing 0.26% to 10,314.59.
Commodity markets were firmer, providing support to resource stocks, as investors returned to precious metals after recent sharp losses.
Russ Mould, investment director at AJ Bell, said that "the sharp sell-off in gold over the past few days has encouraged investors to buy on the dip, scooping up the precious metal in their droves and making it sparkle again," adding that many investors viewed the pullback as "a New Year's sale, a chance to grab more metal at a discounted price."
Gold rebounded from Monday's sharp decline and silver also gained, while oil prices rose, with Brent crude up 0.51% at $66.64 a barrel and West Texas intermediate 0.85% higher at $62.67.
Mould said improved risk appetite was also evident across equity markets, noting that "positive investor sentiment also extended to equity markets with all the major indices in Asia and Europe pushing higher," supported by strong gains in Japan and renewed interest in cyclical sectors.
UK shop price inflation eases in January
In economic news, UK shop price inflation continued to ease in January, falling to a nine-month low.
Data from Worldpanel by Numerator showed like-for-like grocery price inflation slowed to 4% from 4.3% in December, the lowest since April 2025.
Overall take-home grocery sales rose 3.8% in the four weeks to 25 January, while own-label products accounted for a record 52.2% of spending as consumers remained price-conscious.
Discounters continued to gain share, with Lidl and Aldi posting solid growth, while Tesco, Sainsbury's, Ocado and Waitrose all reported rising sales over the period.
Broader global developments were also in focus, with improving sentiment in Asia feeding into European trade.
Patrick Munnelly, market strategy partner at TickMill, said that "Asian markets bounced back strongly after experiencing their steepest decline in over two months," adding that "precious metals like gold and silver also saw a notable rebound following Monday's market turbulence."
He noted that the MSCI Asia Pacific Index rose 2.8%, its best daily performance since April, while technology stocks led a broad-based rally.
Indian shares surged after US president Donald Trump announced a trade deal cutting tariffs on Indian exports and claiming New Delhi would reduce purchases of Russian oil, a move that lifted the Nifty 50 and Sensex by more than 2.5% by the close.
Mould said the agreement "helped the market mood, raising hopes for other countries still in the queue to find a resolution to tariff pressures bestowed upon them by the Trump administration," adding that investors would now be assessing whether the deal "removes the shackles on the market and breathes new life into it, rather than simply resulting in a short-term relief rally."
Munnelly added that Indian equities climbed 2.8% on the news, while the rupee also strengthened against the dollar.
Separately, Australia's central bank raised interest rates by 25 basis points to 3.85%, warning inflation was likely to remain above target for some time.
Munnelly noted that Australian bonds fell following the decision, while the Australian dollar strengthened, reinforcing caution around global monetary policy trajectories.
Miners lead gains, Publicis slides
Among individual stocks in Europe, mining shares led gains as metals prices recovered.
Endeavour Mining rose 3.94% and Fresnillo gained 4.09%, while copper producers Antofagasta and Anglo American climbed 6.26% and 4.67% respectively.
Plus500 jumped 5.08% after announcing the launch of event-based contracts on its US platform through products from Kalshi Exchange.
On the downside, advertising group Publicis slumped 9.24% despite reporting stronger-than-expected full-year underlying revenue, while Danish hearing aid maker Demant fell 10.75% as cautious 2026 guidance overshadowed a fourth-quarter earnings beat.
Shares in offshore wind group Orsted slipped 0.6% even after a US judge cleared the way for its Sunrise Wind project to resume overnight on Monday.
Reporting by Josh White for Sharecast.com.
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