European stocks are poised for a potentially lower opening on Friday, influenced by a continued selloff in major U.S. benchmark indexes, which have now experienced a five-day decline amid volatile trading sessions. Nonetheless, the impact may be softened to a degree by a rise in U.S. stock futures and positive movements in Asian markets.
Asian markets largely experienced gains, with trading in Japan paused due to a national holiday. The region's optimism is buoyed by speculation about upcoming interest rate cuts in China. According to the Financial Times, the People's Bank of China intends to reduce interest rates "at an appropriate time" within the year.
In the ongoing U.S.-China trade rivalry, Beijing intensified its measures by adding 28 American entities to its export control list, aiming to "safeguard national security and interests," as reported by the Commerce Ministry. Additionally, China has proposed imposing export restrictions on certain technologies used in creating battery components and processing key minerals like lithium and gallium.
In Seoul, technology stocks surged following SK Hynix's announcement that it plans to showcase its advanced artificial intelligence memory technologies at the forthcoming CES 2025 in Las Vegas, scheduled from January 7 to 10.
The U.S. dollar remained stable near a two-year peak amid expectations that the Federal Reserve might decelerate the pace of its anticipated rate cuts in 2025.
Gold continued its upward trend, having risen approximately 1 percent in the previous session. Similarly, oil extended its rally from Thursday, driven by optimism surrounding demand recovery in China after President Xi Jinping's commitment to fostering economic growth.
Friday's economic calendar is relatively light, with key focuses likely being German unemployment figures and U.K. mortgage approval statistics. Across the Atlantic, market activity could be influenced by the response to a U.S. report on the manufacturing sector's performance in December.
In the U.S., stocks wavered before closing lower overnight, and the dollar reached a two-year high after data revealed an unexpected drop in weekly jobless claims to an eight-month low, causing renewed concerns over high-interest rates. Market sentiment was further affected by a decline in Tesla's annual sales and reports that Apple is offering significant discounts for its latest phones in China.
The tech-heavy Nasdaq Composite and the S&P 500 both declined roughly 0.2 percent, marking their fifth consecutive daily loss, the longest such streak since April. The Dow Jones Industrial Average fell by 0.4 percent.
In Europe, markets closed higher on Thursday, overcoming early weakness. This occurred despite data indicating a deepening downturn in the eurozone and U.K. manufacturing sectors at the close of 2024. The pan-European STOXX 600 increased by 0.6 percent. Germany's DAX rose 0.6 percent, while France's CAC 40 edged up 0.2 percent, and the U.K.'s FTSE 100 climbed 1.1 percent. Energy stocks surged significantly following a sharp rise in natural gas prices, as the region prepared for freezing winter conditions without Russian gas supplies traversing Ukraine.
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