European Shares Set To Follow Wall Street Lower

(RTTNews) - European stocks may drift lower at open on Friday after major U.S. benchmark indexes extended a selloff for a fifth day overnight amid choppy trading.

That said, rising U.S. stock futures and gains in Asian markets may help limit the downside to some extent.

Most Asian stocks rose, with Japanese markets closed for a holiday. Regional gains were driven by optimism surrounding potential interest rate cuts in China.

The People's Bank of China plans to cut interest rates "at an appropriate time" this year, the Financial Times reported citing comments from the central bank.

Meanwhile, in its latest trade war salvo in the U.S.-China rivalry, Beijing has added 28 U.S. entities to its export control list to "safeguard national security and interests," according to a statement from the Commerce Ministry.

China also proposed export restrictions on some technology used to make battery components and process critical minerals such as lithium and gallium.

Technology stocks soared in Seoul after memory giant SK Hynix said it will showcase its cutting-edge artificial intelligence memory technologies at the upcoming CES 2025, to be held in Las Vegas from January 7 to 10.

The dollar held steady near a two-year high on bets the Federal Reserve may slow its pace of rate cuts in 2025.

Gold extended gains, after having surged about 1 percent in the previous session.

Likewise, oil extended Thursday's rally on optimism over demand recovery in China after a pledge by President Xi Jinping to promote growth.

The day's economic calendar remains light, with German unemployment numbers and U.K. mortgage approvals data likely to garner some attention.

Across the Atlantic, trading may be impacted by reaction to a report on U.S. manufacturing sector activity for December.

U.S. stocks fluctuated before ending lower overnight and the dollar hit a two-year high after data showed weekly jobless claims unexpectedly dropped to an eight-month low, reigniting worries about high interest rates.

Sentiment was also dented by Tesla's annual sales drop and reports suggesting that Apple is offering some pretty huge discounts on its latest phones in China.

The tech-heavy Nasdaq Composite and the S&P 500 both slipped around 0.2 percent, notching their fifth straight daily decline, the longest skid since April. The Dow dipped 0.4 percent.

European stocks closed higher on Thursday, shrugging off early weakness as data showed the downturn in the euro zone and U.K. manufacturing sectors deepened at the end of 2024.

The pan European STOXX 600 advanced 0.6 percent. The German DAX rose 0.6 percent, France's CAC 40 edged up by 0.2 percent and the U.K.'s FTSE 100 added 1.1 percent.

Energy stocks surged after a sharp increase in natural gas prices as the region braced for freezing winter temperatures without Russian supplies delivered via Ukraine.