Europe close: Markets subdued ahead of Christmas break as stocks edge higher

(Sharecast News) - European stock markets finished flat on Friday after a quiet day with volumes likely affected by upcoming public holidays and a shortened trading session in the UK. Equity markets across the US, Europe and Asia will be closed on Monday for Christmas Day, with London's FTSE 100 starting the festivities early finishing at 1230 GMT on Friday. While London will remain closed on Tuesday for Boxing Day, all other major European markets will reopen for the rest of next week.

However, there was no late Santa Rally in sight as data showed that the UK was sailing towards recession and stocks in the video-gaming and sportswear sectors dropped. However, sentiment was helped by a positive start on Wall Street after US inflation slowed more than expected in November.

The pan-European Stoxx 600 index finished 0.13% or 0.64 points higher at 477.58, trading within a tight range of just two points or so during the day. Markets across Europe were also rangebound, with small gains in London, Frankfurt and Milan offset by losses in Paris and Madrid.

Economic data comes in mixed

The UK economy shrank in the third quarter, according to revised figures by the Office for National Statistics, raising the risk of recession. The economy contracted by 0.1% in the period from July to September, down from a previous estimate of no growth. Data also showed that there was no economic growth in the second quarter, down from a previous estimate of 0.2% growth.

Meanwhile, UK retail sales grew 1.3% in November as heavy discounting on Black Friday encouraged hard-pressed consumers to part with their cash. This came after 0.2% growth in October and well ahead of the 0.4% increase expected by analysts.

In other economic news, the US's key measure of inflation hit its lowest level since February 2021. According to the Bureau of Economic Analysis, the annual change in the personal consumption expenditures index slowed to 2.6% in November, down from a downwardly revised 2.9% print in the previous month and below consensus estimates for a reading of 2.8%.

Gaming and sports stocks hit by international readacross

Shares in global gaming developers tumbled on Friday after the Chinese government unveiled new proposals to restrict incentives used by companies to encourage in-game spending and more frequent gameplay. Netherlands-based investment firm Prosus, which owns a stake in Chinese gaming giant Tencent, tumbled 17%, while France's Ubisoft was trading down 1.5%.

Meanwhile, sportswear manufacturers and retailers Puma, adidas and JD Sports were all lower after US sector giant Nike cut its sales targets and warned of a drop in consumer spending.

London's PureTech Health surged 21% after its founded entity, Karuna Therapeutics, agreed to be bought by Bristol Myers Squibb for $14bn.