Europe close: Market mostly lower after turbulent week
By Josh White
Date: Friday 23 Jan 2026
(Sharecast News) - European shares finished mostly lower on Friday as investors weighed fresh geopolitical developments and a heavy slate of economic data, with sentiment tempered by uncertainty around efforts to end the war in Ukraine.
The pan-European Stoxx 600 slipped 0.09% to 608.34, with Germany's DAX edging up 0.18% to 24,900.71 and France's CAC 40 falling 0.07% to 8,143.05, while the UK's FTSE 100 also lost 0.07% to 10,143.44.
Dan Coatsworth, head of markets at AJ Bell, said it was "a calmer end to a chaotic week on the markets," adding that "while it looks like a crisis has been averted, investors' patience has been well and truly tested."
Risk appetite was dented after reports of the first tripartite talks involving Ukraine, Russia and the United States since Moscow's 2022 invasion, held in the United Arab Emirates.
However, details were scarce and there was no confirmation of direct talks between Russian and Ukrainian officials, with negotiations stalled for months over territorial demands, Nato membership and post-war security guarantees.
Coatsworth noted that after "the volatile first three days of the trading week, it's only natural for people to pause and take stock of events," a caution reflected in subdued equity moves.
Commodity markets echoed the uneasy backdrop.
Oil prices firmed after US president Donald Trump said an "armada" was heading towards Iran following a crackdown by Tehran on anti-regime protests, while gold surged to a fresh record high of $4,967 an ounce as investors sought safe havens amid elevated geopolitical risk.
Coatsworth said gold was trading "ever closer to $5,000 an ounce as investors were reluctant to let go of their safety blanket, just in case Donald Trump woke up with another controversial idea."
Patrick Munnelly, market strategy partner at TickMill, added that a weaker dollar had amplified the move, with "gold hitting an all-time high," as investors increasingly turned away from US assets.
Eurozone economic data paints mixed picture
Economic data from the euro area painted a mixed picture.
January's flash HCOB composite PMI output index was unchanged at 51.5, marginally below expectations but still signalling expansion.
Services activity eased to 51.9 from 52.4, while manufacturing showed tentative signs of recovery, with the output index returning to growth at 50.2 from 48.9 and the manufacturing PMI rising to 49.4.
Sentiment improved to a 20-month high, though employment fell, ending a three-month run of job growth.
In Germany, the composite PMI climbed to a three-month high of 52.5.
Hamburg Commercial Bank chief economist Cyrus de la Rubia warned the recovery remained "rather feeble" and said the results were "anything but reassuring" for the European Central Bank given rising services-sector inflation pressures.
UK data was comparatively stronger.
The S&P Global flash UK PMI composite jumped to 53.9 in January from 51.4, the highest since April 2024, with services activity hitting a 21-month high and manufacturing also expanding.
Coatsworth said the FTSE 100's resilience reflected selective buying, noting that "investors loaded up on three names that have served them well over the past year - Rolls-Royce, Endeavour Mining and BAE Systems."
S&P Global's Chris Williamson said businesses had "kicked up a gear" despite geopolitical tensions, though he cautioned that job losses persisted as firms sought to cut costs.
PwC's Jake Finney said the figures suggested the economy had started the year on "much firmer footing," while warning that cost pressures could keep the Bank of England cautious on rate cuts.
Retail sales in the UK also beat expectations in December, with volumes rising 0.4% month-on-month against forecasts for a decline, driven by strong demand for precious metals and supermarket spending.
Annual sales grew 1.3%, the second consecutive yearly increase, though volumes remained below pre-pandemic levels.
Munnelly said interpreting the data was "no straightforward task," pointing out that while sales grew on an annual basis, they fell quarter-on-quarter, meaning "the reality likely lies somewhere in between."
Meanwhile, GfK said UK consumer confidence remained deeply negative at -16 in January, marking a decade since the index last turned positive.
Munnelly noted the survey had "ticked up by one point," with perceptions of personal finances improving more than the headline suggested, even as concerns about the wider economy persisted.
Ericsson jumps on earnings beat, Ubisoft rebounds
In equities, shares in Ericsson jumped after the telecoms group beat quarterly earnings forecasts and announced its first share buyback programme worth SEK 15bn, lifting sentiment across the sector and also supporting Nokia.
Defence group Czechoslovak Group surged as much as 32% on its Amsterdam market debut, while Ubisoft shares stabilised after sharp losses a day earlier, which came after the company warned of a €1bn operating loss for the 2026 financial year following a major restructuring.
Reporting by Josh White for Sharecast.com.
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