European Markets Hold Annual Gains Ahead of Holiday Break

Bridgette Randall
23 Dec, 2024
London

Stocks on European stock exchanges lacked direction in light trading as holiday mood gripped investor sentiment. 

Benchmark indexes in Paris, Frankfurt, Milan, and London traded around the flatline amid a subdued economic outlook and growing political turmoil in Germany and France. 

France delayed the announcement of the new government till late evening on Monday as the country observes the national day of mourning for the victims of the cyclone in the Indian Ocean island of Mayotte. 

French officials confirmed a death toll of 34, but sources in the Indian Ocean island estimate more than 2,000 are likely missing or dead, as many undocumented workers live on the island. 

In a holiday-shortened week, stocks are likely to meander in thin trading as investors look forward to wrapping up the current year with gains. 

For the year so far, as of the close of Friday, the DAX 30 index advanced 18.6%, the FTSE 100 index gained 4.7%, the FTSE MIB, or Milano Indice di Borsa, jumped 11.2%, but the CAC-40 index decreased 3.4%. 

Investors are hoping that the European Central Bank will lower interest rates by at least three times in the approaching year, after ECB President Christine Lagarde commented that the central bank is "very close" to achieving its medium-term inflation target. 

On the economic front, real GDP in the UK stalled in the third quarter, revised down from the first estimate increase of 0.1%, the Office of National Statistics reported Monday.

The services sector growth stalled, and the production sector edged lower; however, the construction sector advanced. 

 

Europe Indexes and Yields

The DAX index increased by 0.01% to 19,889.11; the CAC-40 index advanced by 0.02% to 7,276.47; and the FTSE 100 index inched higher by 0.2% to 8,096.71.

The yield on 10-year German bonds edged lower to 2.29%, French bonds advanced to 3.46%, the UK gilts decreased to 4.53%, and Italian bonds declined to 3.46%.

The euro edged lower to $1.039; the British pound inched up to $1.237; and the U.S. dollar eased to 89.54 Swiss cents.

Brent crude decreased $0.22 to $72.70 a barrel, and the Dutch TTF natural gas rose by €0.98 to €44.73 per MWh. 

 

Europe Stock Movers

Direct Line Insurance Group PLC advanced 3.1% to 250.80 pence, and Aviva PLC edged higher by 0.4% to 458.90, and the Direct Line's board accepted the £3.7 billion merger proposal from Aviva. 

Chesnara Plc declined 0.8% to 256.0 pence after the pension and life insurance company announced the acquisition of Canada Life UK business. 

Swisscom AG increased 0.3% to CHF 500.0 after the company's acquisition of Vodafone Italia was approved by the antitrust regulator and industry ministry of Italy. 

Renault SA decreased 0.3% to €46.67 after Japan's Honda Motor and Nissan confirmed official talks to merge their operations and create the third largest automaker in the world with sales of more than 7.5 million vehicles. 

Renault lowered its stake in Nissan to 15% in 2023 from 43% in 2002, matching the non-voting holding stake of Nissan Motor in the French automaker. 

Knorr-Bremse AG declined 1.6% to €67.95, and the German brake-system manufacturer sold its U.S. subsidiary Sheppard to Balmoral RHS Acquisition Corp as the company renews its focus on domestic core operation. 

Novo Nordisk AS jumped 8.5% to DKK 639.40 after the pharmaceutical company announced disappointing trial results of its weight loss drug CagriSema on Friday. 

Novo Nordisk stock plunged 20% in Friday's session and recovered some of the losses in Monday's trading.