European bourses tracked moderately higher midday Friday, as traders digested prospects of stimulus from China, the European Central Bank's (ECB) recent rate cut, and hopes for a reduction in tensions in the Middle East. Beijing posted a report indicating that the nation's economy expanded by 4.6% year-over-year in the third quarter.
Although this figure fell short of the national target of a 5% gain, it has led to an optimistic outlook for further stimulus from both fiscal and monetary agencies aimed at revitalizing growth. In a key move, the ECB cut its primary policy rate from 3.5% to 3.25% on Thursday, with indications that additional cuts may be forthcoming.
Moreover, the possibility of a ceasefire in the Middle East appears more promising following the recent elimination of Hamas leader Yahya Sinwar earlier this week. Tech and banking stocks emerged as the leading gainers in the session, while the retail and property sectors experienced lagging performance.
Investors were also closely monitoring Wall Street futures, which were signaling a positive session, alongside largely higher closes in Asian markets overnight. According to the latest European Central Bank's Survey of Professional Forecasters, headline inflation in the Eurozone is projected to be 1.9% in 2025, with a forecasted gross domestic product (GDP) growth of 1.2% for the same period.
The pan-continental Stoxx Europe 600 Index saw an uptick of 0.2% mid-session. The Stoxx Europe 600 Technology Index increased by 1.5%, and the Stoxx 600 Banks Index gained 0.5%. In contrast, the Stoxx Europe 600 Oil and Gas Index lifted by 0.4%, while the Stoxx 600 Europe Food and Beverage Index remained flat.
Notably, the REITE, a European REIT index, experienced a decline of 0.4%, with the Stoxx Europe 600 Retail Index also falling by the same margin. Reviewing the national market indexes, Germany's DAX rose by 0.2%, whereas Londons FTSE 100 saw a minor drop of 0.2%. The CAC 40 in Paris was on the rise by 0.5%, with Spain's IBEX 35 remaining stable.
Yields on benchmark 10-year German bonds decreased to near 2.19%. Furthermore, front-month North Sea Brent crude-oil futures fell by 0.4%, trading at $74.13 per barrel. The Euro Stoxx 50 volatility index decreased by 3.7% to 17.59, indicating below-average volatility for European stock markets in the forthcoming 30 days, suggesting a positive outlook.
Generally, a reading above 20 indicates a potential for more turbulent markets ahead, while a figure below 20 generally indicates calmer conditions..