European stocks open higher as Davos draws to close; UK retail sales drop

European stock markets opened higher on Friday, continuing the positive momentum from the previous session. The Stoxx 600 index started 0.47% higher, with all sectors trading in the green. The chemicals sector led the gains, up 0.67%. The World Economic Forum in Davos, Switzerland, concluded after attracting business leaders, politicians, central bankers, and campaigners. Monetary policymakers stated that progress has been made in bringing inflation to 2%, but market expectations for a rate cut from the European Central Bank in March or April may be premature. Investors scaled back bets on a spring rate cut following this sentiment. U.K. retail sales fell by 3.2% in December, the largest monthly drop since January 2021. In the U.S., Congress passed a bill to prevent a government shutdown, extending crucial funding through to March. Asian chip stocks surged following Taiwan Semiconductor Manufacturing Company’s optimistic annual forecast, driven by AI-related demand. TSMC’s shares rose 4.42%, while South Korea’s Samsung Electronics and SK Hynix gained 3.21% and 2.42%, respectively. TSMC expects a healthy growth year in 2024 due to demand for advanced technologies and the AI boom.