Investing.com -- Despite declining in the early part of the session, European stock closed higher Thursday. The rise comes despite investors digesting disappointing manufacturing data at the start of the new year, expecting the European Central Bank to continuing cutting interest rates to boost the struggling regional economies.
Germany's DAX rose 0.6% and France’s CAC 40 clawed back its initial losses, rising 0.2%, while the UK’s FTSE 100 jumped 1.1%.
The main European indices struggled to compete with their US rivals last year, with regional growth hard to find.
This economic disappointment continued Thursday, as factory activity in the eurozone declined at a faster rate in December, offering scant signals of an imminent recovery.
The downturn was again broadbased with the bloc's three largest economies - Germany, France and Italy - stuck in an industrial recession.
HCOB's final eurozone manufacturing Purchasing Managers' Index, compiled by S&P Global, dipped to 45.1 in December, falling from 45.2 in November, and further below the 50 mark separating growth from contraction.
This is expected to result in the European Central Bank continuing to ease monetary policy reasonably aggressively in 2025, even as the Federal Reserve expressed caution over further cuts.
Vodafone (NASDAQ:VOD) completes sale of Italian operations
In corporate news, Vodafone (LON:VOD) stock rose 0.9% after the UK telecom giant completed the sale of its Italian division to Swisscom (OTC:SCMWY) for €8 billion in cash.
As part of the agreement, Vodafone will continue to provide certain services to Vodafone Italy for up to five years post-completion.
Proceeds from the sale will be used to reduce Vodafone’s net debt, with up to €2 billion earmarked for shareholder returns once the ongoing buyback program concludes.
Revolution Beauty and Chrysalis Investments reach settlement
Revolution Beauty (LON:REVB) stock soared over 26% and Chrysalis Investments (LON:CHRY) shares fell 2.4% after the pair resolved a legal dispute through a confidential settlement.
Under the terms of the settlement, Revolution Beauty agreed to pay Chrysalis a non-material sum, representing less than 1% of Chrysalis’ market capitalization.
Oil prices rise on optimism over China
Oil prices climbed on the first trading day of 2025, buoyed by optimism over a recovery in China’s economy.
Investors are hopeful about rising fuel demand from the largest importer in the world following President Xi Jinping’s pledge to prioritize growth.
At 11:40 ET, US crude futures (WTI) were up 2.7% at $73.65 per barrel, while Brent crude also gained 2.3%, trading at $76.39 per barrel.
(Navamya Acharya and Peter Nurse contributed to this article.)