European stock markets closed on a positive note on Monday, with some notable indexes hitting record highs. This uptick was largely attributed to reports suggesting the Trump administration would delay imposing new trade tariffs. Investors were also attentive to the happenings at the World Economic Forum, which commenced today in Davos, Switzerland.
Reports indicate that Donald Trump plans to instruct federal agencies to evaluate trade relationships with China and neighboring countries but will refrain from applying new tariffs on his first day in office.
The pan-European Stoxx 600 posted a modest rise of 0.05%. Among the leading indices, the U.K.'s FTSE 100 gained 0.18%, Germany's DAX climbed 0.42%, and France's CAC 40 advanced by 0.31%. Meanwhile, Switzerland's SMI experienced a 0.39% uplift.
Other European markets, including Austria, Belgium, Greece, Iceland, Ireland, the Netherlands, Poland, Portugal, Spain, and Turkiye, ended the day higher. Conversely, Denmark, Norway, and Russia saw declines, while Finland and Sweden remained flat.
In the U.K., shares of Fresnillo, Anglo American Plc, Spirax Group, Melrose Industries, Experian, Kingfisher, and Mondi rose by 2% to 3%. Stocks like Glencore, IMI, Pershing Square Holdings, IAG, Taylor Wimpey, Intertek Group, Games Workshop, Centrica, Rolls-Royce Holdings, Marks & Spencer, RightMove, and Informa registered gains between 1% to 1.85%. On the downside, Rentokil Initial and Hiscox fell by approximately 2.2%, while Beazley, Pearson, LondonMetric Property, AstraZeneca, Auto Trader Group, JD Sports Fashion, Admiral Group, and BP lost between 1% to 1.5%.
In Germany, BMW surged by 3.2%. Other significant gainers included Daimler Truck Holding, Mercedes-Benz, Commerzbank, BASF, Deutsche Post, and Sartorius, all of which rose by 2% to 3%. Volkswagen, Deutsche Bank, Porsche, Bayer, Adidas, and Continental also posted strong performances. Siemens Energy saw a notable decline of about 3.2% following a stock downgrade to "sell" by UBS. Zalando decreased by 1.7%, and Fresenius Medical Care fell by approximately 1.1%.
In France, stocks like Stellantis, Societe Generale, Kering, Legrand, ArcelorMittal, Eurofins Scientific, Airbus Group, Credit Agricole, Vivendi, Carrefour, Saint-Gobain, BNP Paribas, Teleperformance, and Publicis Groupe ended the day with gains ranging from 1% to 2.3%. However, Engie declined by nearly 2%, with L'Oreal, Renault, LVMH, TotalEnergies, and Unibail Rodamco also closing lower.
Economically, Destatis reported that Germany's producer prices saw a faster rate of increase in December, growing by 0.8% year-on-year, up from a 0.1% rise in November. The primary driver of this growth was a 1.8% increase in capital goods prices, despite consumer goods, durable goods, and intermediate goods also being more expensive compared to the previous year. Energy prices, however, saw a reduction. Monthly data showed a slight decrease in producer prices of 0.1%, reversing the 0.5% increase from November. Forecasts had predicted a 0.3% rise for December. Over the entire year, average producer prices were 1.8% lower in 2024 compared to the previous year, contrasting with a 0.2% increase in 2023.
Eurostat released a report indicating that Eurozone construction output grew at its fastest pace in almost two years during November, with a 1.2% monthly rise following a 0.8% increase in October. Year-over-year, industrial production was up by 1.4% in November, after remaining flat the previous month.
In the U.K., property website Rightmove reported that house prices in January saw the most significant increase since 2020. Newly listed properties hit record numbers, with average house prices rising by 1.7% following a 1.7% decline in December.
In Switzerland, producer and import prices continued their downward trend in December, albeit at a slower rate, marking the least significant drop in fourteen months. A year-on-year decline of 0.9% was noted in December, compared to a 1.5% decrease in November. On a monthly basis, prices remained stable at 0.1% in December, contrasting with a 0.6% fall in November.
