European stocks ended Monday on a positive note, overcoming initial uncertainty as investors absorbed the latest economic indicators from the Eurozone and the United Kingdom, as well as closely monitoring the political scene in France.
The early decline was attributed to a rising U.S. dollar, spurred by a survey revealing that the Eurozone's manufacturing PMI fell to a two-month low of 45.2 in November. This unease was compounded by President-elect Donald Trump's warning of imposing a 100% tariff on BRICS nations if they seek alternative currencies to the U.S. dollar.
Efforts by French Prime Minister Michel Barnier to placate political tensions with budget concessions intended to avert a no-confidence vote and stabilize France’s financial landscape provided some reassurance. As a result, French stocks managed to recover from earlier losses.
The pan-European Stoxx 600 saw an increase of 0.66%, with the UK's FTSE 100 climbing 0.31% and Germany's DAX surging 1.57%. France's CAC 40 rose slightly by 0.02%, while the Swiss SMI advanced by 0.55%.
Elsewhere in Europe, markets in Belgium, Denmark, Finland, Greece, Ireland, the Netherlands, Poland, Russia, Spain, Sweden, and Turkiye saw gains. Conversely, stocks in Austria, Iceland, and Portugal ended weaker, with Norway closing unchanged.
In the UK market, companies such as Howden Joinery, Rolls-Royce Holdings, Spirax Group, BAE Systems, Beazley, and Rentokil Initial grew by 2 to 2.8%. Meanwhile, firms like Associated British Foods, Hiscox, Scottish Mortgage, Admiral Group, Pershing Square Holdings, Anglo American Plc, Melrose Industries, Next, Prudential, M&G, Diploma, Relx, Mondi, and Bunzle increased by 1 to 2%.
However, Vistry Group declined nearly 4%, with B&M European Value Retail dropping 2.62% and Unite Group decreasing by 2.27%. Others including DCC, British Land, Taylor Wimpey, Land Securities, Persimmon, Whitbread, Endeavour Mining, Croda International, EasyJet, BP, and IMI also faced notable declines.
In Germany, companies such as Adidas, Fresenius Medical Care, Munich RE, BMW, Siemens, SAP, BASF, and Hannover Rueck saw gains of 2 to 4%. Additionally, Zalando, Continental, Allianz, Infineon, Siemens Healthineers, and Deutsche Post increased by 1 to 2%.
In France, Hermes International soared by more than 4.5%. LVMH increased by about 2.5%, while Airbus, ArcelorMittal, Air Liquide, STMicroElectronics, and L'Oreal gained 1 to 1.75%. Conversely, Stellantis plummeted by over 6% following the abrupt resignation of CEO Carlos Tavares. Carrefour fell by 5%, and several other major companies such as Unibail Rodamco, Renault, Societe Generale, Vinci, Saint Gobain, Dassault Systemes, TotalEnergies, and Bouygues closed with losses between 2 to 3%.
Survey data from S&P Global highlighted a deeper contraction in the Eurozone’s manufacturing sector in November, with significant declines in factory orders, production, purchasing activity, and inventories. The HCOB Purchasing Managers' Index dipped to 45.2 in November from 46.0 in October, indicating a stronger-than-average decline.
Eurostat reported that the euro area's unemployment rate remained steady at 6.3% in October, consistent with September and in line with expectations, slightly below the 6.6% rate recorded in October 2023.
In the UK, the manufacturing sector faced its most significant downturn in nine months in November, as production and new orders dropped owing to economic pessimism, high costs, and weak demand. The Purchasing Managers' Index fell to 48.0 in November from 49.9 in October, marking a contraction. The preliminary reading was also 48.6.
UK house prices rose at the fastest rate in two years in November, supported by low unemployment and robust income growth, according to Nationwide Building Society. Prices increased by 3.7% year-on-year in November, a sharp rise from 2.4% in October, and the strongest since November 2022, surpassing the anticipated 2.4% growth.
Swiss retail sales rose for the fourth consecutive month in October, albeit at a less than anticipated pace, climbing 1.4% on an annual basis following a 1.8% increase in September.
