European Markets Edge Up as US Inflation Eases, UK Growth Slows

Image Credit: Reuters

European stocks saw slight gains on Thursday, building on the previous day's strong performance driven by mild US inflation data that kept hopes for Federal Reserve rate cuts alive. However, weak UK economic growth dampened sentiment.

At 03:05 ET (08:05 GMT), Germany's DAX rose 0.3%, France's CAC 40 increased by 0.7%, and the UK's FTSE 100 gained 0.6%.

Optimism Following Tame US Inflation  

The drop in core US inflation, combined with strong earnings from major US banks, contributed to a sharp rally on Wall Street, with the indices posting their largest daily gains since November 6. This positive momentum carried over to European markets, with the pan-European STOXX 600 seeing its best performance in four months.

However, sentiment was slightly clouded by weaker-than-expected UK economic data. While Britain's economic output grew by 0.1% in November, it fell short of expectations. Additionally, German consumer prices rose 0.5% in December, surpassing the anticipated 0.4% and recovering from a decline in November.

Auto Manufacturers in Focus  

Stellantis (NYSE:STLA) saw a 1.5% rise in its stock after reporting a 9% year-on-year decline in fourth-quarter shipments, but an improvement compared to the previous quarter. The company is focused on reducing excess inventory. 

Renault (EPA:RENA) also rose 1.5% after announcing a 1.3% sales increase in 2024, driven by strong fourth-quarter performance despite earlier weak demand. 

Richemont (SIX:CFR), the owner of Cartier, exceeded market expectations for third-quarter sales, signaling strength in the luxury sector during the holiday season.

Taiwan Semiconductor Manufacturing (NYSE:TSM) reported a better-than-expected fourth-quarter profit, benefitting from strong demand for AI-driven advanced chips.

Crude Prices Continue to Climb  

Oil prices rose further on Thursday, fueled by soft US inflation data, new Russian oil sanctions, and a reduction in US crude inventories. By 03:05 ET, US crude futures (WTI) were up 0.2% at $78.81 per barrel, while Brent crude held steady at $82.01.

Crude prices surged more than 2% on Wednesday, reaching their highest levels since July, as expectations for softer monetary policy supported economic growth. Additionally, the U.S. Energy Information Administration reported a 2 million-barrel drop in crude oil inventories, indicating tightening supply.

 

 

 

 

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