European Shares Extend Gains On Rate Cut Bets

(RTTNews) - European stocks extended gains on Friday, after having hit their highest level in a month the previous day on the back of strong results from Cartier owner Richemont and renewed rate-cut hopes.

The pan European STOXX 600 was up 0.6 percent at 523.19, on track for its fourth straight weekly gain.

The German DAX climbed 0.8 percent and France's CAC 40 added 0.9 percent as regional government bond yields continued to ease on Fed, ECB and BoE rate-cut bets.

Federal Reserve Governor Christopher Waller told CNBC on Thursday that the U.S. central bank could lower interest rates multiple times this year if inflation continues to ease as expected.

He sees three or four quarter-percentage-point rate reductions this year "if the data cooperates." If the data doesn't cooperate, then you're going to be back to two and going maybe even one, he said.

Closer home, ECB Governing Council member Yannis Stournaras said on Thursday that "policy should continue with a series of rate cuts at the next meetings." Traders expect a 100-basis point cut from ECB this year.

The U.K.'s FTSE 100 up more than 1 percent and the British pound weakened against other major currencies after data showed British retail sales declined unexpectedly in December on falling food store sales.

Retail sales volume decreased 0.3 percent on a monthly basis in December, in contrast to the revised 0.1 percent increase in November and confounding expectations for an increase of 0.4 percent.

On a yearly basis, retail sales grew 3.6 percent, weaker than forecast of 4.2 percent. The data added to expectations for a Bank of England interest rate cut next month.

The latest Eurozone inflation report is due later in the day after major European economies published their consumer prices data earlier in the week.

In corporate news, Glencore jumped nearly 3 percent and Rio Tinto added 1.5 percent after reports emerged that both held talks last year about combining part or all of their businesses.

AstraZeneca rose about 1 percent. The pharmaceutical giant said that the FDA approved its drug Calquence (acalabrutinib) to treat previously untreated mantle cell lymphoma (MCL) in adults who cannot have a stem cell transplant.

China-exposed luxury stocks were subdued in Paris, with LVMH falling nearly 1 percent.

China reported robust 2024 growth today, but a variety of weak signals have raised scepticism among some outside economists.