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Jan 2 Reuters Europe39;s benchmark stock index hit a near twoyear high on Tuesday with energy and banks stocks leading the charge, as investors entered 2024 with undeterred hopes that major central banks might finally deliver interest rate cuts.

The panEuropean STOXX 600 was up 0.4 by 0920 GMT, hitting a 23month high, after a long weekend for New Year Day holiday.

Expectations of softer monetary policy drove a 12.7 jump in the benchmark index in 2023, almost fully rebounding from a 12.9 slump in the previous year after major central banks unleashed rapid rate hikes to conquer spiralling inflation.

All eyes at the start of 2024 are on the nearterm inflation printswhich will be instrumental for the European Central Bank39;s ECB policy decisions in Q1, said analysts at Pantheon Macroeconomics.

Specifically, the ECB is fine with the idea of rate cuts in 2024, just not in the first half of the year.

The ECB broke its longest streak of rate hikes in its 25year history in October.

Signs of economic woes were underscored by a survey showing euro zone factories ended 2023 on the back foot, with activity contracting in December for the 18th straight month.

Among major economies, German manufacturing activity continued to contract although expectations for future business turned positive for the…