European stocks wavered on the first trading session of 2025, after a late-year selloff that was driven by concerns about high valuations and policies under incoming US President Donald Trump.
The pan-European STOXX 600 index dipped 0.2% by 0946 GMT, reversing modest opening gains as trading volumes were light with investors still returning from their New Year holidays.
Europe’s oil and gas sector rose 1% as crude prices nudged higher following a pledge by China’s President Xi Jinping to promote growth. China is the world’s top crude importer.
Banks and automakers led sectoral declines, with losses of more than 1.5%.
The benchmark STOXX 600 suffered its worst quarterly drop in more than two years from October to December, weighed down by uncertainty around interest rates and the Trump administration’s policies that several market participants fear will boost inflation.
Still, the index clocked a roughly 6% gain in 2024, which was, overall, a positive year for stocks.
The US market, in particular, jumped to all-time highs due to optimism about the adoption of AI and the Federal Reserve’s interest rate cuts.
The STOXX 600, too, hit a record high last year but lagged the S&P 500’s 23.3% surge, as a slowing European economy and political turmoil in Germany and France weighed on the sentiment.
European stocks clock worst quarterly showing since 2022
A survey showed manufacturers in the euro zone ended last year on a sour note, with factory activity declining at a faster rate, offering scant signals of an imminent recovery.
HCOB’s final euro zone manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, dipped to 45.1 in December, just under a preliminary estimate and further below the 50 mark separating growth from contraction. Economists were expecting the index to hold steady at 45.2.
Separate surveys earlier showed Asia’s factory powerhouses ended 2024 on a soft note as expectations for the New Year soured amid growing trade risks from a Trump presidency and China’s fragile economic recovery.
On the day, Vestas Wind Systems rose 3.7% after the Danish wind turbine maker said it received new orders in Italy.
Sweden’s Intrum, Europe’s biggest debt collector, surged 16% after the US bankruptcy court confirmed its Chapter 11 restructuring plan.
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