European stock markets traded lower on Monday during the last full trading session of 2024, as investors prepared for a quiet end to the year. The pan-European Stoxx 600 index fell by 0.5% by early afternoon in London, with most sectors posting losses. Technology, industrial, and media stocks led the declines, while oil and gas stocks managed to record gains.
Trading volumes were light as markets across the region prepared to shut early or remain closed until January 2 for the New Year holiday. Despite Monday’s subdued performance, European stocks are on track to close the year with moderate gains. The Stoxx 600 has risen by approximately 5.5% in 2024, a stark contrast to the U.S. S&P 500 index, which has surged by around 25% over the same period.
U.S. markets also opened lower on Monday, reflecting lighter-than-usual trading activity.
Asian markets presented a mixed picture earlier in the day. Investors monitored political turbulence in South Korea and economic data from Japan, which revealed a slower contraction in industrial activity this month.
South Korean airline stocks took a hit following the tragic Jeju Air plane crash on Sunday that claimed 179 lives. Jeju Air’s stock reached an all-time low, while Boeing, whose 737-800 plane was involved in the crash, saw its U.S.-listed shares drop 3.5% in premarket trading. South Korean authorities announced plans to inspect all Boeing 737-800 aircraft operated by local carriers as part of their investigation into the incident. Meanwhile, shares in French aircraft maker Airbus fell 0.6% in London trading, while Dassault Aviation rose 1.5%, becoming one of the top performers on the Stoxx 600.
The European airline sector showed mixed results. Lufthansa gained 0.7%, ranking among the best performers on the Stoxx 600 during afternoon trading. British Airways’ parent company, IAG, traded flat, while EasyJet dropped 0.4%.
British online grocery retailer Ocado found itself at the bottom of the Stoxx 600, with its shares tumbling 3.6%. The decline followed reports last week of widespread issues with its Christmas deliveries, with many customers missing key items. In a statement, Ocado acknowledged that a small percentage of holiday orders were not delivered as expected and issued apologies to affected customers.
Elsewhere in Europe, Spain’s National Statistics Institute (INE) released a flash estimate showing that the country’s annual EU-harmonized inflation rate rose to 2.8% in December, up from 2.4% in November. The figure exceeded analysts’ expectations of 2.6%, according to a Reuters poll. Core inflation, which excludes volatile items such as food and energy, also climbed to 2.6% year-on-year.
The inflation update came as European Central Bank (ECB) Governing Council member Robert Holzmann suggested that the ECB might slow its pace of interest rate cuts due to persistent inflation. Speaking to Austrian newspaper Kurier, Holzmann stated, “I don’t see any interest rate increases at the moment. What may happen, though, is that it will take longer before the next interest rate cut.”
Meanwhile, Italian lawmakers approved the country’s 2025 budget, which aims to reduce the fiscal deficit to comply with EU rules and bring it closer to 3%. In France, Finance Minister Eric Lombard told La Tribune Dimanche that the French government’s 2025 budget would target a deficit of just over 5%, according to a Reuters translation.
Oil and gas stocks remained a bright spot in an otherwise sluggish market, while broader European markets are poised to wrap up 2024 with modest gains despite global headwinds. Investors now turn their focus to 2025, with inflation and monetary policy expected to remain key themes in the year ahead.
