European stocks experienced an upswing on Friday as trading recommenced following the Christmas holiday break. The pan-European STOXX 600 index increased by 0.3%, reaching 505.08, suggesting a modest weekly improvement.
In Germany, the DAX climbed by 0.1%, while France’s CAC 40 advanced by 0.4%. Conversely, the UK's FTSE 100 saw a slight decrease.
The banking sector saw positive movements, with notable gains from Commerzbank, BNP Paribas, Credit Agricole, and Societe Generale, which rose between 1% and 2%. This uptick coincided with a surge in regional government bond yields. Germany’s 10-year bond yield reached 2.346%, the highest point since late November, following a spike in U.S. Treasury yields after a successful seven-year auction.
Concerns over France's fiscal deficit led to a widening yield spread with French bonds. The nation’s new Prime Minister, Francois Bayrou, has pledged to significantly reduce France's deficit to nearly 5% of GDP — a target his predecessor failed to achieve.
Shares of Delivery Hero SE fell by 5.2%, as Taiwan rejected Uber Technologies Inc.’s proposed $950 million acquisition of the company’s Foodpanda operations, citing reduced competition as the reason.
Meanwhile, in London, energy giants BP Plc and Shell saw their stocks rise following an increase in oil prices. This trend is sustained by expectations that economic stimulus measures will fuel recovery in China, the world’s second-largest economy.
The mining sector, however, faced pressure as iron ore plummeted to its lowest level in over five weeks, falling below $100 per ton. This decline followed the release of disappointing industrial profit data from China. In response, shares of Anglo American dropped by 1.4%, while Glencore and Antofagasta each experienced a reduction of around 0.5%.