European stocks rise; inflation optimism continues despite weak UK growth

Investing.com – European stock markets edged higher Thursday, adding to the prior session’s sharp gains after benign US inflation kept potential rate cuts by the Federal Reserve on the table, although weak UK economic growth weighed on sentiment.

At 03:05 ET (08:05 GMT), the in Germany climbed 0.3%, the in France gained 0.7% and the in the UK gained 0.6%.

Optimism post tame US inflation  

The drop in and strong earnings from a number of major US banks helped the major Wall Street indices register on Wednesday their biggest daily percentage gains since Nov. 6 – the day after the U.S. presidential election.

This optimism fed into the European market, with the pan-European recording its strongest daily performance in four months.

The gains have continued Thursday, although they have been tempered by data showing Britain’s rose for the first time in three months in November but by less than expected, edging up by 0.1% from October.

Additionally, German rose 0.5% on the month in December, slightly above the 0.4% expected, and rebounding from the drop of 0.2% seen in November.

Auto manufacturers in spotlight

In corporate news, Stellantis (NYSE:) stock rose 1.5% after the auto giant reported its fourth quarter shipments were down 9% compared to the previous year, to 1.395 million vehicles.

Stellantis, currently focused on reducing bloated inventories, said numbers were an improvement compared to the third quarter, when global shipments were down 20% year-on-year.

Renault (EPA:) stock rose 1.5% after the French automaker said sales grew by 1.3% in 2024, with a strong fourth quarter driven by new launches helping to offset weak demand earlier in the year.

Richemont (SIX:), the owner of Cartier jewellery, beat market expectations for third-quarter sales, in a positive sign for the high-end of the luxury sector over the all-important holiday season.

Elsewhere, Taiwan Semiconductor Manufacturing (NYSE:) reported a stronger-than-expected fourth quarter profit, as the world’s biggest contract chipmaker continued to benefit from strong artificial intelligence-fueled demand for its advanced chips.   

Crude adds to recent highs

Oil prices edged higher Thursday, adding to recent highs, driven by a combination of softer US inflation data, new sanctions on Russian oil, and significant drawdowns in US crude inventories.

By 03:05 ET, the US crude futures (WTI) gained 0.2% to $78.81 a barrel, while the contract traded largely flat a $82.01 a barrel.

Oil prices rose more than 2% on Wednesday, to their highest levels since July, as a benign US inflation report brought expectations of softer monetary policy back into play, potentially supporting economic growth.

Supporting the bullish sentiment, the U.S. Energy Information Administration reported a drawdown in crude oil inventories of 2 million barrels, indicating a tightening of supply.