European stocks closed higher on Friday, with the Stoxx 600 index gaining 0.58% as most sectors and major bourses ended in the green. The pan-European benchmark also closed the month up 0.96%, recovering from its worst monthly performance in a year recorded in October.
Sector Performance
- Tech stocks led the day’s gains, adding 1.8%.
- Mining stocks also performed well, climbing 1.47%, with Anglo American rising 5.4%, and Antofagasta and Glencore each adding more than 1%.
- Telecom stocks were the day’s laggard, slipping 0.19%.
France’s CAC 40 index remained largely unchanged, reflecting ongoing political turmoil, as the country’s risk premium reached parity with Greece’s for the first time.
Inflation Data Supports a Cautious ECB
The latest Eurostat flash data revealed that euro zone inflation rose to 2.3% in November, up from 2% in October, exceeding the European Central Bank’s (ECB) target of 2%. This result aligns with economists’ expectations and strengthens the case for a more cautious interest rate cut at the ECB’s upcoming meeting on December 12.
In France, harmonized inflation edged up to 1.7% in November from 1.6% in October, according to preliminary data from Insee. This reading also met economists’ forecasts.
Broader Market Trends
- U.S. markets saw gains in morning trading during a shortened session following the Thanksgiving holiday.
- In the Asia-Pacific region, markets largely declined, with South Korean stocks leading losses. Meanwhile, stronger-than-expected inflation data from Tokyo heightened expectations of an imminent Bank of Japan rate hike.
European markets are now focused on the ECB’s next moves, as the inflation uptick signals potential challenges ahead for policymakers navigating rate adjustments.
