FX.co ★ European Stocks Close Lower Again

European stock markets concluded Friday's trading session with a downward trend, continuing the losses from earlier. This decline was influenced by apprehensions over political instability in key European markets, fears regarding a potential shutdown of the U.S. government, and looming tariffs on the European Union.

In a recent address, U.S. President-elect Donald Trump cautioned that tariffs could be imposed on the EU if the union fails to address its increasing trade deficit with the U.S. by initiating substantial oil and gas deals.

Economic data brought a surprising halt to the downward trend of German producer prices in November, as revealed by recent Destatis data. The figures highlighted an annual increase of 0.1% in producer prices, a reversal from the 1.1% decline experienced in October.

Meanwhile, in the UK, retail sales for November showed a modest increase of 0.2%, falling short of expectations as consumers appeared to restrain their expenditure towards the end of the year.

The pan-European Stoxx 600 recorded a decrease of 0.88%. The UK's FTSE 100 dipped 0.26%, while Germany's DAX and France's CAC 40 decreased by 0.43% and 0.27%, respectively. Switzerland's SMI dropped by 0.26%.

In other European markets, Denmark's OMXC20 plummeted by more than 13%. Weak performances were noted in Greece, Iceland, Ireland, the Netherlands, Norway, Poland, Portugal, Sweden, and Turkiye. Conversely, Belgium and Spain experienced modest gains, and the Russian market saw a significant rise. Austria and Finland remained stable.

Bank stocks emerged as significant underperformers, with automakers also mostly declining. In the UK market, notable decliners included Severn Trent, JD Sports Fashion, Hiscox, United Utilities, ICG, Standard Chartered, Natwest Group, and BT Group.

Synairgen shares suffered a steep 47% fall following the biopharmaceutical company's announcement of plans to raise up to £25 million for phase 2 trials of its antiviral treatment. Conversely, Frasers Group advanced 2.8%, while B&M European Value Retail, Rentokil Initial, Vistry Group, Segro, Endeavour Mining Plc, Antofagasta, IAG, Unite Group, Land Securities, Fresnillo, and British Land recorded gains ranging between 1% and 2.2%.

In Germany, Deutsche Bank saw a decline of over 2%, with Commerzbank, Munich RE, Infineon, Rheinmetall, Hannover Rueck, Zalando, and Fresenius dropping between 0.9% and 1.7%. However, Vonovia experienced a 2.5% increase, while Siemens Energy and Volkswagen each gained nearly 2%.

In France, shares of Thales, Airbus Group, ArcelorMittal, AXA, Pernod Ricard, Dassault Systemes, and Carrefour closed notably lower. Credit Agricole fell by approximately 0.5% following the announcement of its acquisition of Santander's 30.5% stake in its asset servicing subsidiary, CACEIS. Meanwhile, Vivendi rose nearly 2.5%, with Renault climbing 1.5% and Unibail Rodamco, Teleperformance, Hermes International, LVMH, and Accor gaining between 0.6% and 1%.

The UK's budget deficit showed a significant reduction in November, attributed to decreased interest payments on government debt and increased tax receipts, as reported by the Office for National Statistics. Public sector net borrowing fell by £3.4 billion to £11.2 billion, marking the lowest November borrowing figure since 2021.

In France, domestic market producer prices decreased by 5.2% annually, a slower pace than October's 6% drop. Notably, prices fell for the twelfth consecutive month, although November did see an increase in month-on-month terms of 3.2%, compared to the 0.9% gain in October.

UK car production recorded its steepest decline for November since 1980, largely due to decreased global demand, as per the Society of Motor Manufacturers and Traders data. The production drop amounted to 30.1% year-on-year, marking the ninth consecutive month of decline.