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European stock markets edged slightly higher on Tuesday as trading volumes remained muted due to the holiday season.
- FTSE 100: Up 0.3%
- CAC 40: Increased 0.4%
- DAX: Closed for the day
Most European markets will close early on Tuesday and remain shut on Wednesday for the Christmas holiday.
Key Market Highlights
ECB Rate Outlook: More Cuts Expected in 2025
The European Central Bank (ECB) has hinted at further interest rate cuts next year following its fourth rate reduction in 2024.
- ECB President Christine Lagarde: Reiterated that future rate adjustments would depend on data confirming the central bank’s baseline expectations.
- Inflation: Declined to 2.3% in November, and the ECB projects it will stabilize at its 2% target in 2025.
Lagarde emphasized the need for continued monetary easing as the eurozone economy grapples with slowing growth, while Isabel Schnabel, a key hawkish policymaker, supported a gradual path of rate reductions.
Market Performance in 2024
- DAX: Outperformed, gaining over 18% this year.
- FTSE 100: Modest rise of 5%, weighed down by economic challenges.
- CAC 40: Dropped 3% amid political instability in France.
Corporate Developments
- Vistry Group (LON:VTYV):
- Revised its FY24 adjusted profit before tax forecast to £250 million, down from £300 million, citing market challenges.
- Kooth (LON:KOO):
- Secured a $1.45 million contract with the State of New Jersey to provide mental health support for 50,000 students aged 13-18 through its Soluna platform.
Outlook
While trading is expected to remain subdued due to the holidays, the ECB’s dovish stance could provide some support for equity markets. Investors will also monitor corporate earnings updates and inflation data for clearer direction heading into 2025.
