Indexes In London and Frankfurt Jump to New Record Highs Amid Rate Cut Optimism

Bridgette Randall
17 Jan, 2025
London

Stock market indexes in the eurozone advanced for the third consecutive session in a row amid growing expectations of weakening inflation. 

Benchmark indexes in Frankfurt and London traded at new record highs, and in Paris, they edged to a new high in 2025 after the UK's inflation unexpectedly cooled.

The UK's overall consumer price inflation in December cooled to 2.5% from 2.6% in November, according to a report released by the Office for National Statistics on Thursday. 

Market sentiment was further bolstered after Richemont reported strong sales in the fourth quarter, and investors doubled down on multiple rate cuts this year following comments from the ECB's policy committee member. 

On Thursday, the European Central Bank's Governing Council member Yannis Stournaras said that "policy should continue with a series of rate cuts at the next meetings." 

 

UK Retail Sales Declined In Fourth Quarter

Fourth-quarter retail sales in the UK fell 0.8% from a year ago but were up on an annual basis by 3.6%. 

Fourth-quarter volumes were slower than the third quarter but rose 1.9% compared to the same period a year ago.

Monthly December sales unexpectedly declined 0.3% despite a strong Christmas season. Supermarket monthly sales dropped 1.9%, but clothing sales rebounded from falls in recent months.

For the full 2024, retail sales volumes rose by 0.7%, following a 2.9% fall in 2023 and lower 4.1% in 2022. 

 

Europe Indexes and Yields

The DAX index increased by 0.7% to 20,796.25; the CAC-40 index rose by 0.83% to 7,698.06; and the FTSE 100 index edged higher by 1.05% to 8,479.19.

For the week, the DAX and the CAC-40 are set to advance about 4% and the FTSE 100 index edged up more than 3%. 

The yield on 10-year German bonds edged lower to 2.50%, French bonds fell to 3.31%, the UK gilts decreased to 4.64%, and Italian bonds edged lower to 3.70%.

The euro inched higher to $1.03; the British pound edged lower to $1.22; and the U.S. dollar eased to 91.00 Swiss cents.

Brent crude increased $0.44 to $81.73 a barrel, and the Dutch TTF natural gas fell by €0.90 to €46.23 per MWh.

 

Europe Stock Movers

Glencore Plc is up 2.7% after reports suggested that the resource company held talks with the rival Rio Tinto to merge all or parts of their businesses.

The combined business would rival the longstanding industry leader BHP Group.

Rio Tinto is currently valued at about $103 billion and Glencore at about $55 billion, while BHP is worth about $126 billion.

Teleperformance increased 2.3% to €85.94, and a court approved a $5.5 million settlement in relation to a 2022 controversy over the company's content moderation practices.

In addition, the digital business services provider successfully completed a €500 million bond issue, maturing in 2030, with an annual coupon of 4.25%.

Kering SA gained 5.6% after the owner of the Gucci fashion label agreed to sell a majority stake in three luxury Paris properties to French private equity firm Ardian SAS. 

Net proceeds for Kering will amount to €837 million, or about $861 million.

Private equity investment company Ardian will hold a 60% stake in the prime real estate portfolio, while Kering will retain the remaining 40%.

The deal is expected to close in the first quarter of 2025.