European equities moved lower on Friday, ending the week in negative territory as investors remained cautious amid persistent geopolitical uncertainty.
By 03:02 ET (08:02 GMT), Germany’s DAX slipped 0.1%, France’s CAC 40 eased 0.2%, and the U.K.’s FTSE 100 fell 0.1%.
Greenland tensions raise downgrade concerns
Investor sentiment was weighed down by ongoing tensions surrounding Greenland after talks earlier this week between senior U.S. officials and Danish and Greenlandic foreign ministers failed to produce an agreement on the Arctic territory’s future. Danish Prime Minister Mette Frederiksen said there remained a “fundamental disagreement” with the United States, after U.S. President Donald Trump reiterated that Washington “needs” Greenland.
Frederiksen warned that a prolonged dispute could threaten the stability of NATO, a development that could have serious implications for European security. According to Fitch Ratings, any weakening of the alliance could prompt one-notch sovereign credit rating downgrades for some European countries.
Fitch’s head of sovereign ratings, James Longsdon, said the agency may consider adjusting ratings if NATO cohesion deteriorates, noting that countries closer to Russia would be more exposed to geopolitical risk. In response to the tensions, several European nations, including Germany, France, Norway and Sweden, have already deployed troops to Greenland as a show of support.
German inflation stays subdued
Economic data released earlier Friday showed that German consumer prices were unchanged in December, rising just 1.8% year-on-year. The figure remains below the European Central Bank’s medium-term inflation target of 2.0%.
The ECB has kept interest rates unchanged since ending a rapid rate-cut cycle in June and signaled last month that it is in no rush to adjust policy again, citing resilient economic growth and easing inflation pressures. The central bank is scheduled to hold its next policy meeting in early February.
Semiconductor stocks remain in focus
European corporate earnings were relatively light on Friday, but the semiconductor sector continued to attract attention following strong results from Taiwan Semiconductor Manufacturing. The world’s largest contract chipmaker posted robust fourth-quarter earnings and reaffirmed solid demand from the artificial intelligence sector.
The upbeat outlook fueled gains on Thursday for European chip-related stocks such as ASML, ASM International, and BE Semiconductor.
Oil prices stabilize after sharp losses
Crude prices edged slightly higher on Friday, consolidating after steep losses in the previous session as fears of an immediate U.S. military strike on Iran eased, reducing concerns over supply disruptions.
Brent futures rose 0.1% to $63.85 a barrel, while U.S. West Texas Intermediate crude gained 0.2% to $59.30 a barrel. Both benchmarks had fallen more than 4% on Thursday after President Trump said Iran’s crackdown on protesters appeared to be easing, dampening fears of military escalation.
Despite the late-week volatility, oil prices were still on track to finish the week largely unchanged, after briefly touching multi-month highs earlier in the week when unrest flared in Iran.
