European stocks retreat as investors bank profits ahead of festive break

Investing.com - European stock markets retreated Thursday, following the overnight losses on Wall Street, with investors taking some of the recent profits off the table as the trading year nears the end. 

At 03:10 ET (08:10 GMT), the DAX index in Germany traded 0.3% lower, the CAC 40 in France traded down 0.4% and the FTSE 100 in the U.K. fell 0.3%.

Investors bank profits

The market euphoria caused by last week's dovish shift in the Federal Reserve’s outlook has prompted sharp stock market gains around the globe. Europe is no exception, with the benchmark DAX index in Germany, Europe’s dominant economy, now up around 20% year to date. 

However, the main indices closed lower on Wall Street overnight, with the Dow Jones Industrial Average snapping a nine-day winning streak, as investors chose to bank some profits ahead of the festive break. 

This negative tone continued in Asia overnight, and then in Europe on Thursday.

U.S. growth data due

Data released earlier Thursday showed that Britain ran up a higher-than-expected budget deficit in November, adding to the strain on the public finances and underscoring the limited room for pre-election tax cuts by Prime Minister Rishi Sunak's government.

The main economic data release Thursday, however, will come from across the pond, with the U.S. economy expected to post 5.2% year-on-year growth in the third quarter.

Additionally, Friday sees the U.S. core PCE price index reading, the Fed's preferred measure of underlying inflation, where another slowdown is expected.

Crude steadies after U.S. inventories soar

Oil prices steadied Thursday as continued jitters over global trade disruptions due to tensions in the Middle East were balanced by a surprise increase in U.S. crude inventories.

By 03:10 ET, the U.S. crude futures traded 0.1% higher at $74.28 a barrel, while the Brent contract climbed 0.2% to $79.87 a barrel. 

The U.S. Energy Information Administration announced on Wednesday that U.S. crude inventories rose by 2.9 million barrels last week, compared with expectations for a 2.3 million barrel drop, raising concerns about demand at the world’s largest consumer.

EIA also said U.S. crude output rose to a record 13.3 million barrels per day last week, up from the prior all-time high of 13.2 million barrels.

Crude prices climbed sharply this week as shipping operators announced plans to avoid the Suez Canal as a result of attacks by the Iran-backed Houthi group on vessels in the Red Sea, potentially disrupting oil supplies to the important Asian market.

Additionally, gold futures fell 0.1% to $2,047.15/oz, while EUR/USD traded 0.1% higher at 1.0951.