Stoxx 600, DAX, CAC, FTSE

The European stock market provisionally closed higher on Tuesday, with the regional Stoxx 600 up 0.24%.

London’s FTSE 100 was 0.22% higher, and France’s CAC 40 added nearly 0.8%, while the German DAX shed 0.13%.

— Sawdah Bhaimiya

The regional Stoxx 600 rose after the U.S.’ core inflation showed that prices advanced less than expected in July. The European index was last 0.2% higher.

The consumer price index increased a seasonally adjusted 0.2% monthly and 2.7% yearly, according to the Bureau of Labor Statistics on Tuesday. Dow Jones estimated a 0.2% and 2.8% advancement, respectively.

Core CPI, which excludes volatile food and energy prices, increased 0.3% monthly and 3.1% on a 12-month basis, compared to forecasts of 0.3% and 3%.

— Sawdah Bhaimiya

When asked about Norway’s sovereign wealth fund winding down its investments in Israeli companies, Trond Grande, deputy CEO of Norges Bank Investment Management (NBIM), said the fund would continue to be invested in Israel.

NBIM manages the fund on behalf of the Norwegian population.

“In this benchmark — this is kind of anchored all the way up to Parliament here in Norway — Israel is part of our benchmark,” he told CNBC’s “Squawk Box Europe” on Tuesday. “So that’s a sign that we are [still going] to be invested there.”

On Monday, NBIM announced that, amid the ongoing conflict in Gaza, it was “simplifying” its investments in Israel. That would involve selling all holdings of Israeli companies that aren’t in its equity benchmark index “as soon as possible,” and terminating contracts with external asset managers in Israel to bring all remaining investments in the country in house. The move came after a request from the Norwegian Finance Ministry that NBIM review its management mandate and its investments in Israeli firms.

At the end of June, the fund was invested in 61 Israeli companies, 11 of which were not in the Finance Ministry’s equity benchmark index.

“Due to the conflict and due to opinion here in Norway, I should say there’s a lot of scrutiny around specifically our holdings in Israeli companies, and that has come under increased scrutiny over summer and into the last week,” Grande told CNBC.

“What we’re doing now is really not down-weighing, I wouldn’t put it like that, but we are trying to simplify our portfolio in Israeli equities, because we have ethical guidelines as well. What’s key to us is that we’re not invested in companies that could be in some way, shape or form, contributing to violating the ethical guidelines that we have.”

— Chloe Taylor

Shares of Hannover Re were 2% lower by 8:48 a.m. London time (3:48 a.m. ET), making it one of the worst performers on the Stoxx 600 index.

The German reinsurer maintained its full-year guidance on Tuesday, after second-quarter net profit came in at 833.5 million euros ($968 million).

Analysts had been expecting net income for the quarter to reach 837.2 million euros, according to LSEG data.

Hannover Re said its results came despite “high catastrophe losses” in the first quarter and noted that large losses were “far more moderate” in the second quarter. Expenditures for large losses totaled 976.1 million euros in the first half, driven by the California wildfires that gripped the state earlier this year.

“Overall, we can look back on a good business performance in the first half-year,” CEO Clemens Jungsthöfel said in a statement alongside the results.

“We have further strengthened Hannover Re’s resilience and continue to invest in our efficient positioning and capacity for innovation. Even in volatile times, we are thus able to offer our clients high-quality risk protection.”

— Chloe Taylor, Emilia Hardie

U.K. employment grew by a greater-than-expected 238,000 in the three months to June, according to official data. The number of job vacancies declined by 44,000 in the May to July period, marking the 37th consecutive period of quarterly falls.

— Matthew Ward Perkins

Figures from the Association of International Retail show American visitors spent less in the U.K. last year compared to 2019.

The group says that the decision to end tax-free shopping for international visitors back in 2021 has meant that Americans now wait until getting to mainland Europe to make their purchases. The Association also advocates for VAT-free shopping for international visitors coming into the U.K., claiming it could add a significant boost to the economy.

— Andreea Gheorghe

Norway’s $2 trillion sovereign wealth fund — the largest of its kind in the world — posted a return of 5.7% in the first half of the year, citing strong returns on financial stocks.

On its equity investments, which accounted for 70.6% of holdings at the end of June, the fund saw a 6.7% return. Its fixed income investments saw a 3.3% return, while its real estate investments returned 4%.

The fund’s unlisted renewable energy infrastructure holdings returned 9.4%.

Overall, the fund’s return was 5 basis points lower than the return on its benchmark index.

“The result is driven by good returns in the stock market, particularly in the financial sector,” Nicolai Tangen, CEO of Norges Bank Investment Management (NBIM) — which manages the fund on behalf of the Norwegian population — said in a statement on Tuesday.

The strength of the Norwegian krone weighed on the fund’s value in the first half. As the krone gained around 11.5% against the U.S. dollar in the reporting period, it contributed to a fall in value of 1 billion kroner ($97.7 million), NBIM said.

Set up in the 1990s to invest excess revenues from Norway’s oil and gas industry, the fund currently invests in more than 8,500 companies across the world. Owning almost 1.5% of all listed companies, it’s the world’s biggest single investor in stocks.

In the first quarter of the year, the fund reported a $40 billion loss after a sell off in the tech sector.  

The results come a day after NBIM announced it would sell all its investments in Israeli companies that aren’t in its equity benchmark index “as soon as possible,” and terminate contracts with external asset managers in Israel.

“These measures were taken in response to extraordinary circumstances,” Tangen said on Monday. “The situation in Gaza is a serious humanitarian crisis. We are invested in companies that operate in a country at war, and conditions in the West Bank and Gaza have recently worsened. In response, we will further strengthen our due diligence.”

— Chloe Taylor

Good morning from London, and welcome to CNBC’s live blog covering all the action and business news in European financial markets on Tuesday.

Futures data from IG suggests a generally positive open for European indexes, with London’s FTSE 100 seen opening 0.14% higher, France’s CAC 40 up 0.3% and Germany’s DAX up 0.25%, and Italy’s FTSE MIB 0.27% higher.

Regional bourses closed in mixed territory on Monday, with the regional Stoxx 600 shedding 0.06%.

Global investors remain focused on the tariff landscape this week, with traders digesting U.S. President Donald Trump’s decision to delay higher U.S. tariffs on Chinese goods for another 90 days.

Asia-Pacific markets mostly rose overnight as investors assessed the U.S.-China trade truce that gives the world’s largest economies more room to negotiate a deal.

In the U.S., traders are focused on inflation data out later today. The consumer price index and the producer price index, due out Thursday, will be significant factors in the direction interest rates take at the Federal Reserve’s next meeting in September.

— Holly Ellyatt

There are no major earnings reports from Europe on Tuesday, but analysts will be looking out for the latest U.K. jobs data, due at 7 a.m. London time, and economic sentiment data from Germany.

Investors are also keeping an eye on the latest U.S. consumer price index report, hoping to gather potential insight into how the Federal Reserve will handle short-term interest rates, especially as the S&P 500 hovers near an all-time high.

Economists polled by Dow Jones expect the index to advance 0.2% month over month in July, and 2.8% on an annualized basis. So-called core consumer price index, which strips out food and energy from the reading, is expected to climb 0.3% month over month and 3.1% year over year.

— Holly Ellyatt, Brian Evans