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European Stocks Rise as US Trading Resumes After Thanksgiving

European shares experienced a slight increase on Friday, indicating a second week of gains, particularly in the chemical and retail sectors as US trading recommenced following the Thanksgiving holiday.

The Stoxx Europe 600 Index closed the session 0.3 percent higher, with chemicals leading the rally as BASF SE gained following a report by Bloomberg News suggesting that Abu Dhabi National Oil Co. (ADNOC) is looking into a potential acquisition of Wintershall Dea, the European energy explorer it sponsors. Retailers and energy stocks also saw gains.

BASF and ADNOC have not provided any comments on the deal, as reported in the Bloomberg News article.

Stocks in the region are currently trading at a two-month high, with the main index poised for its best month since January. Optimism has been fueled by expectations of easing inflation allowing for more accommodative central banks.

European Central Bank President, Christine Lagarde, stated that the bank is in a position to pause and assess the impact of its tightening, while Governing Council Member Robert Holzmann projected an equal probability of a rate hike or cut in the second quarter of 2024.

Additionally, in individual stock movements, Team17 shares plummeted by a record 43 percent in London after the maker of the Dredge fishing adventure video game warned that some of its titles are not performing as well as anticipated, with other companies in the sector also feeling the pressure.

Investors have shown a strong inclination towards equities, with the fastest pace of inflows in almost two years, according to a Bank of America Corp. note citing EPFR Global data.

Global stock funds have seen inflows of approximately $40 billion in the two weeks through Nov. 21, while European equities had their 37th week of outflows at $32 million. Overall, the European stock market has shown promising signs of recovery and growth, along with a positive outlook for the month ahead.