Investing.com - European stock markets traded largely lower Friday, with doubts remaining over valuations going forward given the weak state of regional economies.

At 03:10 ET (08:10 GMT), the DAX index in Germany dropped 0.1% and the CAC 40 in France slipped 0.4%, while the FTSE 100 in the U.K. traded largely unchanged.

European economic weakness

The broad-based pan-European STOXX 600 gained roughly 6% in 2024, but suffered its worst quarterly drop in more than two years from October to December, weighed by regional political uncertainty, worries over monetary policy as well as concerns that Donald Trump’s return to the White House will result in a trade war.

Data released on Thursday showed factory activity in the eurozone declining at a faster rate, offering scant signals of an imminent recovery.

German unemployment data for December is due later in the session, and is expected to show a slight uptick in the unemployment rate to 6.2%, from 6.1% the prior month.

The European Central Bank cut interest rates last month, and is expected to authorize at least four 25 basis point cuts in 2025.

Crude on track for weekly increase

Oil prices stabilized Friday, consolidating the prior session’s gains amid hopes of policy support to revive economic growth in China, the world’s largest crude importer.

By 03:10 ET, the US crude futures (WTI) climbed 0.1% to $73.18 a barrel, while the Brent contract rose 0.1% to $75.95 a barrel.

Both contracts closed at their highest in more than two months on Thursday, and are on track for their second weekly increase after investors returned from holidays, improving trade liquidity.

China's President Xi Jinping pledged more proactive policies to promote growth earlier this week, and the Financial Times reported on Friday that the Chinese central bank is reportedly planning to cut interest rates from the current 1.5% level “at an appropriate time” this year.

The outlook for oil demand largely hinges on the hope that China, the second largest economy in the world, can revive its economy, especially as there are concerns about a potential oversupply due to expected increases in production from non-OPEC countries.