European stocks concluded mostly on an upward trend on Tuesday despite facing early-session challenges. This performance was driven by investors processing a variety of regional economic data while maintaining optimism for further monetary easing actions from central banks in the first quarter of 2025.
Trade concerns stemming from anticipated tariff increases by the incoming Trump administration and noted growth in eurozone consumer price inflation acted as restraining forces on market potential.
The pan-European STOXX 600 index advanced by 0.32%. In national markets, Germany's DAX rose by 0.62% and France's CAC 40 by 0.59%. Meanwhile, the UK's FTSE 100 experienced a slight decline of 0.05%, and Switzerland's SMI registered a notable increase of 1.19%.
Elsewhere across European markets, indices in Belgium, Finland, Greece, Ireland, the Netherlands, Norway, Poland, and Sweden all posted gains. Conversely, Austria, Denmark, Portugal, Russia, and Türkiye witnessed decreases, while indices in Iceland and Spain remained stable.
On the UK front, Next saw a substantial uptick of 3.75% following strong Christmas sales and an upward revision of its 2025 profit forecast. JD Sports Fashion and IAG increased by 3.6% and 2.7%, respectively, with BP gaining nearly 2%.
Other notable movements included Halma, Shell, Rolls-Royce Holdings, Pearson, Auto Trader Group, Unilever, Coca-Cola HBC, and Centrica, all of which grew between 1% to 1.6%. However, Taylor Wimpey, WPP, and Persimmon suffered declines of 4% to 4.5%, with NatWest Group and Barclays falling 3.5% and 2.6%, respectively. Schroders, Pershing Square Holdings, Experian, Howden Joinery, Sainsbury (J), Standard Chartered, Barratt, Redrow, BT Group, and Glencore also experienced sharp declines.
In Germany, Daimler Truck Holding, Sartorius, Beiersdorf, and Porsche made significant gains of 2.5% to 4.3%. Additional gains were seen from Adidas, Munich RE, Rheinmetall, Hannover Rueck, Merck, Infineon, SAP, and Qiagen, improving by 1.4% to 1.8%. Deutsche Boerse, Commerzbank, and Deutsche Bank also performed notably well.
Conversely, Puma dropped nearly 2.5%, with Siemens Energy, Zalando, Continental, Vonovia, and BMW also facing losses between 1% to 2%.
French market highlights included STMicroelectronics, LVMH, Danone, Hermes International, and Sanofi, all closing with gains ranging from 1.4% to 2%. Additional growth came from Kering, Vinci, Eurofins Scientific, Thales, Stellantis, Schneider Electric, Safran, and Unibail-Rodamco, each advancing by 1% to 1.2%. On the downside, Edenred nearly fell 2.5%, with Vivendi, Teleperformance, Societe Generale, Saint-Gobain, ArcelorMittal, Airbus Group, and Publicis Groupe losing between 0.5% to 1.6%.
Economic data indicated that Eurozone inflation reached a five-month high in December, driven primarily by increased service costs, according to preliminary figures from Eurostat. The harmonized index of consumer prices rose by 2.4% year-over-year, aligning with prior expectations.
On employment, Eurostat noted that the euro area unemployment rate remained steady in November at a seasonally adjusted 6.3%, unchanged from October and slightly below the previous year's 6.5%.
Germany's construction sector continued in recession territory as indicated by the HCOB Construction Purchasing Managers' Index, which declined to 37.8 in December from 38.0 in November. This downturn is attributed to political uncertainties affecting orders.
In France, the consumer price index held steady at 1.3% in December, meeting the same level as November. However, harmonized inflation inched up to 1.8% from 1.7%, still under the European Central Bank's target of 2%.
According to mortgage lender Halifax, UK house prices experienced a decline for the first time in nine months, dropping by 0.2% in December against a 1.2% rise in November, signaling a slowdown in market momentum towards year-end but with expectations of moderate gains ahead.
Additional UK data from the British Retail Consortium showed retail sales improving by 3.1% in December, following a 3.4% decrease in November, and the construction PMI decreasing from 55.2 points in November to 53.3 in December, as reported by S&P Global.