Key Points
- European stock markets opened higher, with gains in Germany’s DAX, France’s CAC 40, and the UK’s FTSE 100.
- Russia launched a hypersonic missile at Dnipro, escalating the Russia-Ukraine conflict.
- Germany’s Q3 GDP growth was revised to 0.1%, with exports and investment declining and household and government expenditures growing modestly.
- Crude oil prices rose amid geopolitical tensions, and Bitcoin saw gains as investors sought safe-haven assets during increased global uncertainty.
European equity markets opened higher on Friday as investors balanced optimism in equities with concerns over escalating geopolitical tensions and revised economic data from Germany. At 3:50 AM ET (8:50 AM GMT), Germany’s DAX increased by 0.54% or 102.50 to reach 19,248.67, France’s CAC 40 climbed 0.41% or 29.77 7,243.09, and the UK’s FTSE 100 rose 0.68% or 55.60 to 8,204.87. Despite the gains, the intensifying conflict between Russia and Ukraine and signs of economic slowdown in Germany kept markets cautious.
Tensions soared after Russian President Vladimir Putin launched a hypersonic ballistic missile at the Ukrainian city of Dnipro. This came as a response to the U.S. and U.K. decision to supply Ukraine with advanced weaponry capable of targeting Russian territory. The attack marks a significant escalation in the nearly three-year conflict and aligns with recent warnings that Russia may lower its threshold for deploying nuclear weapons. Investors fear the continued conflict could further disrupt global markets and heighten European energy insecurity.
Germany’s economic growth for the third quarter was revised downward, reflecting a slower-than-expected expansion. According to the country’s statistics office, gross domestic product (GDP) grew by only 0.1% compared to the previous quarter, down from the earlier estimate of 0.2%.
Household spending showed resilience, rising 0.3% quarter-on-quarter, and government expenditures increased by 0.4%. However, investment activity declined, with machinery and equipment investment falling 0.2% and construction investment down 0.3%. Exports were particularly weak, with goods and services registering a 1.9% decrease, including a sharper 2.4% drop in goods exports.
Geopolitical concerns also impacted commodity and cryptocurrency markets. Crude oil prices rose as fears over the Russia-Ukraine conflict overshadowed recent increases in U.S. crude stockpiles. Brent Crude Futures climbed 0.57% to 74.65 per barrel, while Crude Oil Futures gained 0.60%, reaching $70.52 per barrel. Bitcoin also increased, reflecting investor interest in safe-haven digital assets amid global uncertainty.
As markets navigate these challenges, investors will closely watch developments in the conflict and the trajectory of Germany’s economy, which remains critical to European stability.
