by Claude Chendjou

PARIS (Reuters) – European stock markets ended higher on Thursday for the first session of 2025 in the wake of the positive trend observed on Wall Street late in the morning in New York, with investors showing optimism with the imminent arrival in power of Donald Trump and on the prospects of American companies.

In Paris, the CAC 40 ended with a gain of 0.18%, to 7,393.76 points. The British Footsie advanced 1.07% and the German Dax gained 0.48%.

The EuroStoxx 50 index increased by 0.38%, the FTSEurofirst 300 by 0.68% and the Stoxx 600 by 0.61%.

The low trading volumes for this first session of the year, pending the real re-entry of the financial markets next week, gave rise to a volatile session where the gains were led in Europe by the oil and gas compartment (+3.80%) and to a lesser extent by that of new technologies (+0.74%). Automobiles (-0.47%) on the other hand weighed.

VALUES IN EUROPE

Stellantis (-0.14%) and Volkswagen (-1.89%) ended in the red while according to the Automotive Industry Platform (PFA), the French automobile market, second in continental Europe, risks experiencing 2025 a sixth year of historically low sales. Geox, the Italian shoe and clothing manufacturer, fell 7.69% after presenting its industrial plan for 2025-2029.

Vestas Wind Systems jumped 6.75% as the Danish wind turbine manufacturer announced it had received new orders in Italy.

A WALL STREET

At mid-session on Wall Street, the Dow Jones advanced by 0.80%, the Standard & Poor’s 500 by 0.75% and the Nasdaq by 0.82%, the indices being driven in particular by the energy sector (+1.32%). Tesla’s fall of almost 5%, after disappointing deliveries in 2024, limits the Nasdaq’s gains.

US President-elect Donald Trump will officially take office on January 20. He promised tax cuts and increased deregulation of the economy, which could benefit businesses.

According to data compiled by LSEG, earnings per share of S&P 500 companies are expected to increase by 10.67% in 2025.

TODAY’S INDICATORS

Unemployment claims in the United States fell last week, to 211,000 from 220,000 (revised) the previous week, according to the Labor Department. Economists expected an average of 222,000 unemployment registrations.

Industrial sector activity in the euro zone slowed at a faster pace than previously estimated, with the S&P Global/HCOB PMI final at 45.1 in December after 45.2 in November.

Industrial activity in Britain contracted at its fastest rate in 11 months in December, as companies in the sector cut staff due to higher taxes and weak export demand , shows the final PMI index.

The pace of growth in credit to businesses and households in the euro zone slowed in November, to 1.0% and 0.9% respectively year-on-year in November, according to data from the European Central Bank (ECB).

CHANGES

The US dollar hit its highest level in two years for the first session of the year on Thursday, building on strong gains in 2024, forecasts of US economic growth outpacing other countries and continued growth in relatively high interest rates in the United States.

“In terms of economic growth for 2025, the dollar has no rival,” underlines Adam Button, chief currency analyst at ForexLive.

The data released Thursday confirmed the strength of the job market ahead of the official monthly report on the matter which will be published next week.

The dollar index, up 0.82% against a basket of reference currencies, is now flirting with the threshold of 110 points.

The euro fell by more than 1%, to 1.0250 dollars, getting a little closer to parity with the greenback, while an ECB rate cut of 113 basis points is expected this year by the markets, compared to only 42 basis points of reduction for the American Federal Reserve (Fed).

RATE

The strengthening of the dollar interrupted the decline in American bond yields which tended slightly: the American ten-year stood at 4.5791% and the two-year gained almost a basis point, at 4.2601%.

The yield on the ten-year German Bund followed this trend and ended practically stable, at 4.2601%, despite the sluggish economy in the euro zone.

Its French equivalent lost 1.8 basis points at the close, to 3.213%.

OIL

The oil market rises sharply on Thursday with the hope of new recovery measures in China in view of the latest economic data, including that of activity in the industrial sector by the Caixin firm. Chinese President Xi Jinping has also pledged to implement more proactive economic policies in 2025.

Brent rose 2.36% to $76.4 per barrel and American light crude (West Texas Intermediate, WTI) rose 2.62% to $73.61.

TO BE CONTINUED FRIDAY:

(Written by Claude Chendjou, edited by Blandine Hénault)

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