On Friday, European stocks ended the trading session on a downtrend, impacted by lackluster economic reports from the U.K. and Germany, ongoing political turmoil in France, and concerns over potential interest rate hikes spurred by U.S. President-elect Donald Trump. Investors maintained a cautious approach as they anticipated the Federal Reserve's forthcoming monetary policy announcement scheduled for next Wednesday.
Amidst the political landscape in France, President Emmanuel Macron designated François Bayrou as the new prime minister, succeeding Michel Barnier, who was displaced following a no-confidence vote. This move reflects the persistent political instability in the country.
The pan-European Stoxx 600 index fell by 0.53%. Notably, the FTSE 100 in the U.K., Germany's DAX, and France's CAC 40 reported declines of 0.14%, 0.1%, and 0.15%, respectively. Meanwhile, Switzerland's SMI finished the session down by 0.18%.
Elsewhere in Europe, stock markets in Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Poland, Portugal, Russia, Spain, and Sweden also weakened, though most registered only slight dips. In contrast, markets in Austria, Greece, Iceland, and Turkiye concluded the day higher.
In the U.K., Endeavour Mining's shares dropped nearly 3%, while Spirax Group, Anglo American Plc, Fresnillo, Rio Tinto, Prudential, Berkeley Group Holdings, JD Sports Fashion, Glencore, Melrose Industries, Croda International, BAE Systems, and Frasers Group all posted losses ranging from 1% to 3%. Conversely, Rentokil Initial surged by 3.5%, with Beazley gaining close to 3%. Diageo, Hiscox, Marks & Spencer, Pershing Square Holdings, Smith (DS), Next, and Aviva saw advances of 1% to 2.5%.
In Germany, stocks including RWE, Vonovia, Bayer, Adidas, Zalando, Siemens, Puma, Sartorius, Rheinmetall, Merck, BASF, and Beiersdorf closed down within the 1% to 2.5% range. On a positive note, Munich RE rose more than 5% following the revelation of a profit target of €6 billion for 2025, alongside projected group insurance revenue of €64 billion. Hannover Rueck, Volkswagen, and Allianz observed gains of 1% to 1.5%. Henkel, Deutsche Bank, Continental, BMW, and Mercedes-Benz experienced moderate increases.
In France, firms such as Vivendi, ArcelorMittal, Sanofi, Teleperformance, and LVMH ended significantly lower. Meanwhile, AXA, Renault, Stellantis, Engie, Orange, and Bouygues posted commendable gains.
On the economic front, Eurostat reported that industrial production in the Eurozone was stagnant in October, with growth in capital goods output being offset by declines in energy and consumer goods production. Industrial output remained flat after contracting by 1.5% in September, aligning with market expectations.
In Germany, wholesale prices decreased by 0.6% year-on-year in November, a lesser decline compared to October’s 0.8% drop. This marked the weakest decrease in four months since prices began falling in May 2023. Additionally, Germany's exports plunged at the swiftest rate in ten months during October, with a 2.8% month-over-month fall primarily attributed to a significant decrease in demand from the U.S., while overall imports saw a slight decline, according to Destatis.
In France, consumer price inflation experienced a slight increase as initially estimated in November, with the consumer price index rising 1.3% annually, marginally up from October's 1.2%, corresponding with flash data disclosed on November 29.
The U.K. economy contracted slightly for the second consecutive month in October, primarily due to a decrease in industrial production, according to official statistics. The real gross domestic product unexpectedly shrank by 0.1% in October, mirroring September's rate of decline, as reported by the Office for National Statistics. The GDP was anticipated to grow by 0.1%.
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