Europe close: Shares finish lower on weak US survey data

The pan-regional Stoxx 600 finished 0.49% lower at 508.20. US markets opened higher, despite a survey showing factory sector activity in the States shrank for a ninth month in a row at the end of 2024.

The Institute for Supply Management's manufacturing sector Purchasing Managers' Index improved from a reading of 48.4 for November to 49.3 in December (consensus: 48.4).

The 50 point level denotes the threshold separating a contraction from an expansion both for the headline as well as for all of the subindices.

A key sub-index tracking new orders increased from 50.4 during the prior month to reach 52.5.

"US stock indices managed to halt their five-session sell-off but their European peers end the day in the red," said Axel Rudolph, analyst at online trading platform IG.

"In Europe, the French CAC 40 continued to underperform, falling by around 1.5% on the day and down on the week amid the country's political instability. US stock indices managed to stem their sell-off as the ISM manufacturing PMI rose more than expected."

"The oil price continues to advance and trades in 2-1/2 month highs amid demand optimism regarding China's potential economic recovery following the country's President Xi Jinping's New Year speech and, more importantly, a drop in US inventories earlier in the week."

In economic news, the number of unemployed people in Germany rose by less than forecast last month, keeping the jobless rate unexpectedly steady, according to figures released by the government on Friday.

Some 10,000 additional people were without a job in December, giving a total of 2.869m for the month, according to federal labour office data.

However, the consensus estimate was looking for 15,000 increase month-on-month.

Oil prices hit two-month highs, with Brent Crude sitting just below $76 a barrel, helping major producers such as BP and Shell.

Reporting by Frank Prenesti for Sharecast.com