European stock exchanges experienced a moderate decline on Friday afternoon as traders mirrored their Asian counterparts by steering clear of technology stocks, while oil sector shares dipped amid concerns regarding stagnant global demand anticipated for 2025. In contrast, food and beverage stocks defied the downward trend, showing a slight increase.
Investors were also attentive to Wall Street futures, which indicated potential gains; however, Asian markets had closed firmly lower overnight. The latest report from the European Central Bank indicates that Europeans are forecasting a 2.6% inflation rate over the next year, a decrease from the previously anticipated 2.8% rate for December, as revealed in its monthly survey.
The pan-European Stoxx Europe 600 Index slipped by 0.3% during midday trading, supplemented by a 1.2% drop in the Stoxx Europe 600 Technology Index and a 0.3% decline in the Stoxx 600 Banks Index. The Stoxx Europe 600 Oil and Gas Index fell by 0.9%, while the Stoxx 600 Europe Food and Beverage Index saw a slight increase of 0.2%.
Further contributing to the market's downward trend, the REITE, a European real estate investment trust index, fell by 0.5%, alongside a 0.3% decline in the Stoxx Europe 600 Retail Index. On a national scale, Germany's DAX index recorded a decrease of 0.3%. Conversely, London's FTSE 100 showed a 0.3% uptick.
Paris's CAC 40 declined by 0.4%, while Spain's IBEX 35 dropped by 0.1%. In the bond market, yields on the benchmark 10-year German bonds decreased, hovering around 2.38%. Additionally, frontline North Sea Brent crude oil futures fell by 1.4% to settle at $72.58 per barrel. Looking ahead, the Euro Stoxx 50 volatility index increased by 4.9% to reach 18.90.
Nonetheless, the index is still signaling below-average volatility for the European stock markets within the next month, which is typically viewed as a favorable indicator. Readings above 20 usually point to tumultuous market conditions, whereas a result below 20 suggests more stable trading environments..