European equities experienced an uptick on Thursday following favorable U.S. inflation numbers, which leave room for the Federal Reserve to potentially reduce interest rates later this year. However, gains across the region were tempered by unexpectedly weak GDP figures from the U.K. that were released earlier in the day.
According to the Office for National Statistics, the U.K. economy saw minor growth in November after experiencing two consecutive months of contraction. The nation's gross domestic product increased by 0.1% on a monthly basis in November, succeeding an unchanged 0.1% decline in October. Economists had anticipated a 0.2% growth in GDP.
Meanwhile, in Germany, consumer price inflation accelerated in December, reaching the highest level in nearly a year, as confirmed by final data from Destatis. The consumer price index rose by 2.6% in December, up from a 2.2% increase in November, aligning with the preliminary figures released on January 7. This marks the highest inflation rate since January when prices had seen a 2.9% rise. EU-harmonized inflation remained steady at 2.8% in December following an upward revision for November from 2.4%.
The pan-European STOXX 600 index increased by 0.6% to 518.06, building on a 1.3% gain on Wednesday that ended a three-day losing streak and marked its best daily performance since August 2024. Germany's DAX index advanced by 0.2%, France's CAC 40 surged by 1.4%, and the U.K.’s FTSE 100 rose by 0.5% ahead of the release of the European Central Bank meeting minutes and U.S. weekly jobless claims and retail sales reports later in the day.
In corporate earnings news, quarterly reports from Bank of America, Morgan Stanley, and UnitedHealth are expected before the U.S. markets open.
Shares of Richemont, the luxury group that owns Cartier, jumped 14% after reporting stronger-than-anticipated sales for the third quarter. Renault's stock climbed 4%, with the French automaker noting a 1.3% increase in sales volume in 2024, driven by rising electric vehicle adoption. Stellantis shares went up by 1.1% despite a 9% drop in fourth-quarter shipments. Antofagasta rose by 3%, even after reporting unchanged copper production in 2024.
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