Germany's economy shrinks more than expected in fourth quarter
- European stock markets opened higher, driven by anticipation of the European Central Bank's monetary policy decision.
- Germany's economy shrank by 0.2% in the fourth quarter, worse than expected.
- Investors remain cautious as they monitor economic indicators and corporate earnings for future trends.
On January 30, 2025, European stock markets opened higher amidst key earnings announcements and the anticipation of the European Central Bank's monetary policy decision. Investors were particularly focused on a 25-basis-point interest rate cut expected during the ECB's first meeting of the year. Economic data from major economies, including France and Germany, was also under scrutiny, with Germany's economy contracting by 0.2% in the fourth quarter, exceeding earlier expectations of a 0.1% contraction. In light of weak market performances, several prominent companies reported earnings, and German lender Deutsche Bank announced a significant decline in profits due to legal provisions. This disappointing performance signals ongoing struggles in the financial sector and reflects broader economic challenges, particularly in key eurozone nations. Shell, on the other hand, slightly improved its stock value following a dividend increase despite a drop in annual profits, indicating mixed economic signals across sectors. The atmosphere remained cautious as investors seek to gauge the immediate outlook of the eurozone economy amidst various economic pressures.