European stocks closed slightly lower on Friday after losses from L'Oréal outweighed gains from Ubisoft and Hermès, amid rising pressures from increasing government bond yields. The Stoxx 600 index fell by 0.1% at the end of the trading session on Friday, despite a 0.2% increase over the entire week.
L'Oréal's shares dropped by 7.6% after the French cosmetics company reported disappointing growth in fourth-quarter sales. The banking index declined by 0.3%, with BNP Paribas's stock decreasing by 2.0% following UBS's downgrade of the French bank's shares from "buy" to "neutral."
In contrast, healthcare stocks were among the biggest gainers, supported by a 9.7% increase in Coloplast's shares after the Danish medical equipment manufacturer announced better-than-expected results in the first quarter. Hermès’s shares rose by 4.8%, reaching an unprecedented level after the Birkin bag manufacturer stated it would increase prices following stronger sales of luxury products compared to its competitors at the end of 2023.
Ubisoft's shares surged by 13.8% following the French video game company's announcement of slightly higher-than-expected net bookings in the third quarter. The technology sector in Europe continued its excellent performance, advancing by 1.2% during the day, marking seven consecutive days of daily gains.
Companies in the Stoxx 600 index are expected to see their revenues decline by 7.6% year-on-year in the fourth quarter, according to data from the London Stock Exchange Group. Approximately 55% of the 85 companies that have reported results exceeded expectations.
Stock performance during the day was affected by a rise in the yield on Germany's 10-year government bonds for the third consecutive session, reaching 2.38% at the end of trading, as bets on an early interest rate cut from the European Central Bank diminished following several warnings against this move.
Among the losers, Suedzucker's shares fell by 13.7%, making it the worst performer on the Stoxx 600 index at the end of the session after the Swedish engineering and architecture consultancy announced earnings before interest, taxes, depreciation, and amortization below expectations in the fourth quarter.
