On Friday, European stock markets experienced a positive close as investors engaged in selective buying after the resumption of trading post-Christmas holidays.
The trading activity across most regional markets remained somewhat muted, largely due to the absence of significant market catalysts and in anticipation of the upcoming New Year holidays.
France's newly appointed Prime Minister, François Bayrou, has committed to significantly reducing the country's deficit to approximately 5% of its GDP—a target his predecessor struggled to meet.
Banking stocks received a boost from a rise in regional government bond yields. Meanwhile, energy companies attracted investor attention as oil prices rose, spurred by expectations that economic stimulus measures would drive a recovery in China, the world’s second-largest economy.
The pan-European Stoxx 600 index rose by 0.67%. In specific national markets, Germany's DAX increased by 0.68%, France's CAC 40 advanced by 1%, and the U.K.'s FTSE 100 experienced a modest gain of 0.16%. Switzerland's SMI index climbed by 0.88%.
Among other European markets, Austria, Belgium, Denmark, Finland, Greece, Iceland, the Netherlands, Norway, Portugal, Spain, Sweden, and Turkiye closed on a higher note. Conversely, Poland saw only marginal gains, while Ireland and Russia ended weaker.
In the UK market, Centrica saw a substantial rally of approximately 2.3% following the company's announcement regarding the commencement of a £300 million extension of its share buyback strategy, set to conclude by September 2025. Diageo, BP, Schroders, Pearson, Coca-Cola HBC, United Utilities, HSBC Holdings, and Aviva also ended the day with gains.
On the downside, Next fell by around 2.6%, while Pershing Square Holdings, Croda International, EasyJet, Anglo American Plc, Whitbread, RightMove, Alliance Witan, and Endeavour Mining decreased by between 1% and 2.2%.
In Germany, stocks such as Brenntag, Volkswagen, BMW, Bayer, Fresenius Medical Care, Mercedes-Benz, Commerzbank, Merck, Deutsche Bank, SAP, and Daimler Truck Holding advanced by 1% to 2.3%. However, Covestro and Siemens Energy saw losses exceeding 2%, and Munich RE ended down by 1.2%.
Over in France, Crédit Agricole made notable gains above 2.5%. In addition, Stellantis, Bouygues, BNP Paribas, Teleperformance, AXA, Sanofi, Kering, Pernod Ricard, TotalEnergies, Engie, Vinci, and Société Générale increased by 1% to 2%.