European Shares Cautious But on Track for Strong Quarterly Gain

The benchmark KOSPI fell 0.19% to close at 3,424 on Tuesday, retreating from gains in the previous session as weakness in chip and IT shares weighed on sentiment.

Among major decliners, Samsung Electronics slipped 0.59%, SK hynix eased 0.14%, LG Energy Solution shed 1.28%, Celltrion tumbled 2.74%, and Naver dropped 2%.

In contrast, gains in industrials partly cushioned the downside, with Hanwha Aerospace jumping 4.72%, HD Hyundai Heavy Industries rising 4.58%, and Hyundai Motor adding 0.23%.

On the global front, risk appetite was curbed by the threat of a US government shutdown that could delay key payrolls data and leave the Fed with fewer signals ahead of its October meeting.

Meanwhile, China’s factory activity contracted for a sixth month, clouding the outlook for Korean exporters, while weaker output in Japan pointed to broader regional demand softness.

In China, the Shangai Composite Index rose 21 points or 0.53 percent on Tuesday.

Leading the gains are Avic Shenyang Aircraft (10.00%), China Molybdenum (5.97%) and Metallurgical (5.14%).

Top losers were China CITIC Bank (-1.51%), Petrochina (-1.47%) and CITIC Securities (-1.25%).

TA-125 increased to an all-time high of 3209.00 Index Points.

Over the past 4 weeks, TEL AVIV TA-125 IND gained 2.79%, and in the last 12 months, it increased 53.03%.

The Nikkei 225 slipped 0.25% to 44,933 while the Topix gained 0.19% to 3,138 on Tuesday, with Japanese shares ending mixed as soft economic data weighed on sentiment.

Retail sales fell 1.1% in August, missing forecasts of a 1% rise and marking the first contraction since February 2022.

Industrial production also declined more than expected, highlighting persistent economic headwinds.

Meanwhile, the Bank of Japan’s September Summary of Opinions showed some policymakers backed further rate hikes if growth and inflation projections materialize, while others favored keeping rates low to cushion the economy from US tariff pressures.

Technology names underperformed, with losses from Advantest (-3.3%), SoftBank Group (-1.9%) and Tokyo Electron (-0.6%).

The S&P/ASX 200 slipped 0.2% to close at 8,849 on Tuesday, retreating from a near two-week high earlier in the session and ending a three-day winning streak.

The pullback came as investors digested the latest monetary policy decision from the Reserve Bank of Australia, which kept the cash rate unchanged at 3.60%, as widely expected.

The central bank pointed to persistent inflation risks, with August CPI at 3%—the highest since July 2024—and strong Q2 GDP growth of 1.8%, the fastest since September 2023.

These factors gave the RBA room to maintain a tightening bias, cautioning that inflation may remain elevated despite earlier rate cuts.

In addition, the bank noted signs of recovering private demand, further supporting its decision to keep rates on hold.

Financial stocks lagged, with Commonwealth Bank down 0.9%, NAB and ANZ losing 0.5%, and Westpac falling 0.3%.

In contrast, mining stocks outperformed, as BHP rose 2.3% and Rio Tinto gained 2.1%.

European equity markets were set to open little changed on Tuesday as investors braced for key inflation data from across the region that could shape the outlook for European Central Bank monetary policy.

Sentiment was also clouded by political gridlock in the US and renewed scrutiny of President Donald Trump’s latest tariffs.

In the UK, the Labour Party continues its annual conference in Liverpool, where Prime Minister Keir Starmer is scheduled to address delegates later today.

On Monday, Finance Minister Rachel Reeves offered few details in her speech on the upcoming Autumn Budget, where she is expected to unveil tax increases.

In early trade, Euro Stoxx 50 and Stoxx 600 futures were flat.