Key Points
- European stock markets dipped slightly as 2024 trading winds down.
- STOXX 600 set to end the year with a 5.5% gain; DAX rose 19%, and CAC 40 fell 2.6%.
- Spain’s annual inflation increased to 2.8% in December. Due to rising inflation concerns, the ECB may delay further rate cuts.
- Crude oil prices slid, with WTI and Brent on course for annual losses.
European stock markets edged slightly lower on Monday as investors took profits on the final full trading day of 2024 after a largely positive year for regional indices. By mid-morning, Germany’s DAX traded down by 0.21% or 41.28 to 19,943.04, France’s CAC 40 dipped by 0.026% or 1.91 to 7,353.46, and the U.K.’s FTSE 100 declined 0.27% or 21.71 to 8,128.07. Market activity remained subdued as traders prepared for the New Year holiday, with early closures anticipated for many European exchanges on Tuesday.
Despite Monday’s mild retreat, the pan-European STOXX 600 index is set to close the year with a gain of approximately 5.5%. The DAX led the region with an impressive 19% climb, while the FTSE 100 posted a modest 5% increase. In contrast, France’s CAC 40 underperformed, shedding 2.6% over the year.
Inflationary pressures were highlighted on Monday as Spain reported a rise in its annual EU-harmonized inflation rate to 2.8% in December, up from 2.4% in November. This follows the European Central Bank’s recent interest rate cuts to combat economic stagnation.
However, over the weekend, ECB Governing Council member Robert Holzmann suggested that additional rate cuts might be delayed due to the uptick in inflation. This echoes concerns about the Eurozone’s annual inflation, which accelerated to 2.2% in November, surpassing the ECB’s 2% target.
Meanwhile, crude oil prices slipped in thin holiday trading. By early morning, U.S. crude futures fell 0.1% to $70.53 per barrel, and Brent crude dropped 0.1% to $73.69. Both benchmarks remain on track for annual losses of 1.5% and 4%, respectively, primarily due to concerns over reduced demand from China, the world’s largest oil importer.
