European Markets Wobble Amid Uncertainty Over China Stimulus and French Budget Plans

European stocks experienced turbulence as investors await China's stimulus details and react to France's 2025 budget addressing fiscal concerns. Key indices such as the STOXX 600, FTSE 100, and France's CAC 40 saw declines amid Middle East tensions, inflation worries, and corporate investment moves.

European stocks saw a decline on Friday as investors anxiously awaited China's anticipated stimulus updates. French markets showed a reduction following the government's unveiling of the 2025 budget designed to tackle the escalating fiscal deficit. The STOXX 600 index dropped by 0.1%, concluding a volatile week marked by Shanghai market uncertainties, Middle East tensions affecting oil prices, and U.S. inflation data raising concerns over the cooling trajectory of inflation.

Britain's FTSE 100 dipped 0.2%, with Germany's DAX and Spain's IBEX each logging a 0.1% decline. Similarly, France's CAC 40 slipped due to the government's 2025 budget plans, which include 60 billion euros in spending cuts and tax increases on the wealthy and large corporations. Later, Fitch was set to release its assessment of France's debt status. "We believe Barnier's strategies will prove effective, though the figures require adjustment," stated Andrea Cicione, head of research at TS Lombard, anticipating measures to address European Commission concerns.

Investors showed cautious sentiment ahead of the China finance ministry's press conference on Saturday, where hopes for stimulus announcements remain high. On Thursday, European markets closed lower, influenced by U.S. inflation data suggesting a potential rate cut by the Federal Reserve next month. Meanwhile, individual stocks such as Stellantis and Sainsbury's experienced notable declines.

(With inputs from agencies.)