European shares inch up to fresh two-year highs tracking Wall St gains

European shares opened slightly higher on Tuesday, hitting fresh two-year highs, buoyed by overnight gains on Wall Street, as investors evaluated their expectations for interest rate cuts in a busy week for markets. The pan-European STOXX 600 index was up 0.2%, as of 0825 GMT, rising for the fifth straight session.

European shares opened slightly higher on Tuesday, hitting fresh two-year highs, buoyed by overnight gains on Wall Street, as investors evaluated their expectations for interest rate cuts in a busy week for markets.

The pan-European STOXX 600 index was up 0.2%, as of 0825 GMT, rising for the fifth straight session. Wall Street notched fresh record highs on Monday, with focus turning to the upcoming big-tech earnings from the U.S. and the Federal Reserve's interest rate decision, both of which could set the tone for markets.

In Europe, while there is a broad consensus that interest rate cuts are imminent, policymakers are divided on the timing of such actions. Traders have priced in roughly a 75% chance of at least a 25 basis point cut from the European Central Bank in April. Industrials received a boost, helped by a 4.9% jump in Skanska following Jefferies' upgrade of the Swedish builder to "buy" from "underperform."

Diageo, however, shed 3.2% after the world's top spirits maker missed estimates for first-half year sales. Among other movers, France's CAC 40 index added 0.1%, helmed by a 1.8% rise in Renault after the carmaker ditched plans to list its electric vehicle business Ampere, citing sluggish stock market conditions.