(Sharecast News) - European shares closed lower on Monday, the first session of the shortened Christmas week, as a surge in precious metal prices, a heavy flow of UK economic updates and thinning year-end liquidity weighed on sentiment.
The pan-European Stoxx 600 fell 0.13% to 586.75, with Germany's DAX down 0.02% at 24,283.97, France's CAC 40 sliding 0.37% to 8,121.07 and the UK's FTSE 100 losing 0.32% to 9,865.97.
Joshua Mahony, chief market analyst at Scope Markets, said European markets had entered "the final full week of 2025 on a largely tepid tone with many easing back ahead of a shortened week that looks likely to see lower volume and lower volatility."
He added that after a period marked by "a raft of big-ticket, market-moving events, traders are expecting things to calm down towards year-end."
Russ Mould, investment director at AJ Bell, noted that "the FTSE 100 started Christmas week on the back foot, with healthcare and utility stocks acting as a drag on the index," reflecting the defensive tilt that has weighed on UK equities during recent sessions.
UK economy ekes out third-quarter growth
In economic news, revised figures from the Office for National Statistics showed the UK economy grew by 0.1% in the three months to September, in line with the initial estimate, while growth in the second quarter was revised down to 0.2% from 0.3%.
"Today's updated figures paint the same picture as our initial estimate, with growth continuing to slow in the third quarter," said ONS director of economic statistics Liz McKeown.
"Growth in services was partially offset by falls in production, with a marked drop in car manufacturing.
"Our latest figures show the household saving ratio, whilst falling in recent periods, remains high by historic standards."
Real GDP per head showed no growth in the quarter and was up 0.9% year on year, while real household disposable income per head fell 0.8%.
Mahony said the confirmation of UK growth at 0.1% "lays the groundwork for tomorrow's US GDP release," with investors remaining sensitive to any signs of slowing momentum across major economies.
Business sentiment meanwhile remained weak, according to the Confederation of British Industry's latest growth indicator, which showed a weighted balance of -30% in December, extending a run of negative readings that began in late 2024.
Services volumes posted a balance of -29%, with business and professional services at -24% and consumer services at -46%.
Distribution sales expectations fell to -47%, the weakest since June 2020, while manufacturers forecast a modest decline at -17%.
Mould said the CBI poll "paints a gloomy picture for the UK economy heading into 2026," adding that it "suggests private sector activity is on course to fall in the fourth quarter, with expectations for the first three months of next year strikingly downbeat."
CBI deputy economist Alpesh Paella said: "Our latest surveys round off a disappointing year for private sector growth.
"They mark a continuation of the headwinds that have plagued businesses over the past 12 months - tepid demand conditions, with households cautious around spending; and strong cost pressures squeezing margins.
"Uncertainty ahead of November's Budget also put the brakes on key spending decisions and big projects, choking up pipelines of work.
"The latest growth indicator suggests that the alleviation of this uncertainty hasn't materially boosted activity."
Markets were also digesting trade developments after China said it would impose provisional duties of between 21.9% and 42.7% on certain dairy products imported from the European Union from Tuesday, citing damage to its domestic industry.
Around 60 companies, including Arla Foods, would face tariffs of between 28.6% and 29.7%, while FrieslandCampina's Belgian and Dutch units would pay the top rate of 42.7%, according to Reuters.
Miners in focus as gold prices rise, renewables in the red
In equities, miners were in focus as gold and silver prices hit record highs.
Gold broke above $4,400 to reach $4,417.53 per ounce, while silver rose 3% to a record $69.14 per ounce, lifting shares in Fresnillo by 3.22% and Glencore by 0.55%.
Mould said "precious metals miners led the way, as they have for much of 2025, with gold hitting a new all-time high on expectations of further interest rate cuts from the Federal Reserve and robust demand for its safe haven qualities."
Mahony said gold and silver had "pushed into fresh record highs this morning as traders once again pile into the precious metal space amid ongoing concerns about debt and fiscal sustainability in the face of record high yields in Japan," adding that diversification away from gold and looser carbon emissions policies had also supported gains in platinum and palladium.
In France, Abivax surged 15.4% as the biotech group continued to attract investor attention, though it declined to comment on market rumours of a potential takeover by Eli Lilly.
Renewable energy stocks fell sharply, with Orsted down 12.67% and Vestas Wind Systems sliding 2.65%, after the US Department of the Interior said it was suspending leases on five offshore wind projects already under construction, citing national security concerns.
In autos, Stellantis dropped 4.63% while Volkswagen finished flat after Italy's competition authority closed an investigation into electric vehicle marketing practices on Friday, requiring carmakers to improve transparency around driving range, battery degradation and warranties.
Reporting by Josh White for Sharecast.com.
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