European Stock Markets Retreat Amid Profit Taking

European stock markets saw a decline on Friday as traders opted to secure profits following a strong start to the year 2025. Investors are also bracing for a more substantial return to normal business operations next week.

In Asia, major equity indices predominantly finished higher. Notably, Seoul experienced a significant surge of nearly two percent, even amid increasing political uncertainty in South Korea, which is the region's fourth-largest economy.

Other Asian markets, including Hong Kong, Sydney, and Taipei, also reported gains. However, Shanghai faced a downturn for the second consecutive session.

The U.S. stock market concluded lower on Thursday, which was the first trading day of 2025. The ongoing 'post-Christmas malaise' in U.S. stocks was noticeable, with investors awaiting the inauguration of president-elect Donald Trump, who is anticipated to have a significant impact on the markets this year.

Reports suggest that departing President Joe Biden is set to block a proposed $14.9 billion acquisition of US Steel by Japan's Nippon Steel, with an announcement expected as soon as Friday. Nippon Steel has described this deal as a critical support for Pennsylvania's struggling steel sector.

Initially, U.S. stocks opened positively on Thursday but ultimately closed modestly lower. Tesla was a notable contributor to the decline, with its shares dropping 6.1 percent after the company reported fourth-quarter auto sales that fell short of forecasts.

The dollar experienced a decrease on Friday compared to the euro, pound, and yen. Just a day prior, the U.S. currency had achieved multi-year highs against several major currencies, fueled by expectations that the U.S. economy will outperform others in 2025.

Additionally, the Chinese yuan hit its lowest value against the dollar since late 2023. Analysts suggest that the poor performance of Chinese equities signals a decline in market sentiment regarding Chinese assets at the year's beginning and ahead of Trump's return to the White House.

Investors are preparing for Trump's inauguration on January 20, which is anticipated to be followed by significant tariff announcements, particularly targeting Chinese goods, potentially causing disruptions in international trade.

Jobless claims data released on Thursday indicated a more significant drop than expected, underscoring a strong labor market in the U.S. This development decreases the likelihood of the Federal Reserve implementing additional rate cuts in the near term.

Looking ahead, key economic indicators to watch include inflation statistics and retail sales figures from the recent holiday shopping season.

Market Performance

As for market shifts, here are the latest numbers:

• London FTSE 100: DOWN 0.2 percent at 8,247.80 points
• Paris CAC 40: DOWN 0.9 percent at 7,327.26
• Frankfurt DAX: DOWN 0.4 percent at 19,940.47
• Tokyo Nikkei 225: closed
• Hong Kong Hang Seng Index: UP 0.7 percent at 19,760.27 (close)
• Shanghai Composite: DOWN 1.6 percent at 3,211.43 (close)
• New York Dow: DOWN 0.4 percent at 42,392.27 (close)

In currency exchange, the Euro is up against the dollar, trading at $1.0283 compared to $1.0269 on Thursday. The Pound also gained against the dollar, moving up to $1.2398 from $1.2382. Meanwhile, the dollar slipped against the yen, now at 157.34 yen, a decrease from 157.52 yen.

Oil prices have also taken a hit, with West Texas Intermediate down 0.4 percent, now at $72.82 per barrel, while Brent North Sea Crude has similarly decreased by 0.4 percent to $75.63 per barrel.

Stocks, Markets, Economy