European Markets Retreat as Investors Secure Profits; Eyes on U.S. Growth Data and Oil Stability


European Markets Retreat as Investors Secure Profits; Eyes on U.S. Growth Data and Oil Stability

European stock markets took a step back on Thursday, following overnight losses on Wall Street, as investors opted to secure some of the recent profits with the end of the trading year approaching.

At 03:10 ET (08:10 GMT), Germany’s DAX index traded 0.3% lower, France’s CAC 40 was down 0.4%, and the U.K.’s FTSE 100 fell 0.3%.

Investors Book Profits: The market enthusiasm generated by the Federal Reserve’s dovish shift last week led to significant gains in stock markets worldwide. Europe, including the dominant German economy’s benchmark DAX index, has seen a year-to-date increase of approximately 20%. However, Wall Street’s main indices closed lower overnight, breaking the Dow Jones Industrial Average’s nine-day winning streak, as investors opted to secure profits ahead of the festive break.

This negative sentiment persisted in Asian markets overnight and continued in European markets on Thursday.

U.S. Growth Data Expected: Earlier on Thursday, data revealed that the UK experienced a higher-than-expected budget deficit in November, intensifying pressure on public finances and highlighting limited room for tax cuts by Prime Minister Rishi Sunak’s government ahead of the election.

The main economic data release on Thursday is anticipated from the U.S., with the economy expected to report 5.2% year-on-year growth in the third quarter. Furthermore, Friday will see the release of the U.S. core PCE price index, the Fed’s preferred measure of underlying inflation, where another slowdown is anticipated.

Crude Stabilizes after Surge in U.S. Inventories: Oil prices steadied on Thursday amid ongoing concerns about global trade disruptions due to tensions in the Middle East, offset by a surprising increase in U.S. crude inventories.

At 03:10 ET, U.S. crude futures traded 0.1% higher at $74.28 a barrel, while the Brent contract climbed 0.2% to $79.87 a barrel.

The U.S. Energy Information Administration’s announcement on Wednesday that U.S. crude inventories rose by 2.9 million barrels last week, contrary to expectations for a 2.3 million barrel drop, raised concerns about demand in the world’s largest consumer.

The EIA also reported that U.S. crude output reached a record 13.3 million barrels per day last week, surpassing the prior all-time high of 13.2 million barrels.

Crude prices surged earlier in the week as shipping operators revealed plans to avoid the Suez Canal due to attacks by the Iran-backed Houthi group on vessels in the Red Sea, potentially disrupting oil supplies to the crucial Asian market.

Additionally, gold futures dipped 0.1% to $2,047.15/oz, while EUR/USD traded 0.1% higher at 1.0951.

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