(Bloomberg) -- European stocks fell in the penultimate trading session of 2024, a year of modest gains for the region that contrasted with the bullish Wall Street rally.
The Stoxx Europe 600 Index dropped 0.5% by the close, as US stocks sank for a third straight session. Trading volumes in Europe remained thin, with Stoxx 600 volumes about half of the 30-day average, according to data compiled by Bloomberg. A range of European bourses will remain closed Tuesday, while some Euronext platforms and the London stock exchange will operate for half a day.
Technology and media stocks dropped the most, while energy and banks outperformed. Among individual stocks, shares in Siemens Healthineers fell after Siemens AG said it would make a decision about its plans for the unit by the end of next year.
Investors continued to watch inflation, with the consumer price index in Spain coming in hotter than anticipated at 2.8%. Over the weekend, Governing Council member Robert Holzmann said the European Central Bank could postpone a rate cut if inflation risks from energy prices or a stronger depreciation of the euro materialize.
“The first-half will be complicated for Europe,” said Nicolas Domont, a fund manager at Optigestion in Paris. “The elections in Germany will fuel uncertainty moving forward and the market just doesn’t like that.”
After rallying as much as 10% to a record high by September, the Stoxx 600 has since given up about half of these gains on concerns about regional political uncertainty and the threat of US tariffs under President-elect Donald Trump. By contrast, the S&P 500 benchmark in the US surged 24%, with the valuation of tech stocks swelling well above their historic average.
France’s blue-chip index CAC 40 has been among the biggest underperformers this year, declining about 3%. President Emmanuel Macron appointed Francois Bayrou earlier in December as the country’s fourth premier in a year. He inherits a deeply divided National Assembly that has repeatedly failed to agree on fiscal reforms.
“Despite the attractive valuation levels of the CAC 40, we doubt that a catch-up will take place in the weeks or even months to come,” Christopher Dembik, senior investment adviser at Pictet Asset Management, wrote in a note. “It is clearly not immune to French political risk.”
For more on equity markets:
- US Tech Stocks Set to Drop for a Third Session
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--With assistance from Sagarika Jaisinghani.
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