European stocks on course to snap three-week winning streak

5:18 am Friday, December 13th, 2024

By Sruthi Shankar

(Reuters) -European stocks slipped on Friday, and were on track to break a three-week winning streak, as investors sought clarity on the pace of monetary easing in the euro zone next year amid concerns over slowing economic growth and a potential trade war.

The pan-European STOXX 600 index edged down 0.1% and looked on track to end the week 0.3% lower.

Stock markets have been choppy this week as investors digested stimulus updates from China, inflation data from the U.S. and euro zone as well as the European Central Bank’s fourth rate cut of the year on Thursday.

ECB policymaker Francois Villeroy de Galhau said the central bank is likely to further ease rates next year and is at ease with market projections for future rates. Traders are pricing in rate cuts of 115 basis points by the end of next year.

“Markets started pricing increased odds of a 50 bps ECB cut in January, which we would fade. G10 central banks that have made jumbo cuts lately have seen rising unemployment or currency appreciation, neither of which the ECB faces,” strategists at BCA Research said in a note.

Focus now shifts to France, where President Emmanuel Macron is set to name a new prime minister, and the U.S. Federal Reserve’s policy meeting next week, when a rate cut is expected.

Munich Re climbed 5% after the German reinsurer said that it is targeting 6 billion euros ($6.27 billion) in net profit for next year, with its reinsurance business alone anticipated to make up 5.1 billion euros.

That pushed the German DAX higher by 0.3% to a record high.

German Chancellor Olaf Scholz is set to hold a vote of confidence in parliament on Monday, a move that would pave the way for snap elections following the collapse of his three-way governing coalition.

Novo Nordisk’s shares fell about 3%, weighing the most on STOXX 600. Britons paying privately for obesity drugs are increasingly choosing Eli Lilly’s Mounjaro over Novo Nordisk’s Wegovy, Reuters reported based on views from online pharmacies.

The UK’s FTSE 100 got a lift as the pound fell after data showed Britain’s economy shrank for a second month in October, the first back-to-back falls in output since the onset of the COVID-19 pandemic.

London-listed shares of Tullow Oil reversed opening gains and were last down 5.5% after U.S. oil and gas company Kosmos Energy said it was in early talks for an all-share acquisition of the West Africa-focussed firm.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Mrigank Dhaniwala)