European Stocks Rally on Chinese Growth and Mining Merger Speculation

European markets closed higher on Friday, buoyed by robust Chinese growth data and merger talks in the mining sector. Germany's DAX rose 1.3%, France's CAC 40 gained over 1%, and the UK’s FTSE 100 surged 1.4% to a record high.

China's economy expanded 5.4% year-on-year in Q4 2024, surpassing expectations and achieving its fastest growth since mid-2023. Annual growth reached 5.0%, aligning with the government’s target. As a key export market, China’s recovery lifts sentiment across European industries, offsetting concerns over a broader slowdown.

Meanwhile, British retail sales fell unexpectedly in December, dropping 0.3% month-on-month after a modest 0.1% gain in November. Supermarkets experienced their worst food sales since 2013, according to the Office for National Statistics.

The mining sector saw a surge after reports suggested Glencore and Rio Tinto discussed a potential mega-merger, sparking speculation about future M&A activity despite talks reportedly ending. Both stocks rallied as investors anticipated further consolidation in the sector.

In pharmaceuticals, AstraZeneca rose 0.05% after gaining US FDA approval for its mantle cell lymphoma drug. In the US, strong earnings from State Street and Citizens Financial added to the positive tone, with both firms exceeding analyst expectations.

Oil prices dipped Friday but were on track for a fourth consecutive weekly gain, supported by US sanctions on Russian crude. By 11:30 ET, WTI crude fell 0.6% to $77.35 a barrel, while Brent dropped 0.5% to $80.95, with both contracts up roughly 3% for the week.

The Biden administration’s widened sanctions on Russian oil are expected to disrupt supply and support prices, maintaining upward momentum for crude.

Markets remain optimistic, driven by strong global signals and industry developments.