The European stock markets closed lower in Friday trading as the Stoxx Europe dropped 0.12%, Germany's DAX was down 0.30%, the FTSE 100 declined 0.04%, France's CAC fell 0.65%, and the Swiss Market Index lost 0.47%.

In Germany, inflation rose by an average of 2.2% in 2025 compared with 2024, according to the Federal Statistical Office.

"This means that consumer price trends have stabilized," Destatis President Ruth Brand said in a statement. "In previous years it was significantly above 2%."

On a monthly basis inflation was 1.8% in December, compared with a year earlier, decelerating from 2.3% in both November and October.

In Italy, inflation increased 0.2% on monthly basis in December, compared with November, and 1.2% on an annual basis, up from 1.1% in November, according to the Italian National Institute for Statistics.

The annual increase was mainly due to the prices of services related to transport, and unprocessed food, Istat said.

And in corporate news, Novo Nordisk's Wegovy in a maximum dose of up to 7.2 milligrams per week has received approval from the UK's Medicines and Healthcare products Regulatory Agency for patients with obesity only, the regulator said Friday.

The approval for the drug, chemically known as semaglutide, covers only patients with a body mass index of at least 30 that use the drug for weight management alongside diet and exercise, according to the agency.

Patients will be required to inject three doses of 2.4 mg, one after each other on the same day, the agency said.

Shares of the Danish pharmaceutical company surged more than 6% in Copenhagen.

HSBC said Friday it has launched a review of its Singapore insurance manufacturing business as part of its move to streamline global operations.

The review only covers HSBC Life Singapore, with all options to be considered for the insurance manufacturing business, the lender said.

"Singapore is a priority market for the group and HSBC continues to accelerate growth in wealth and wholesale banking," the company said. "HSBC will continue to offer market-leading insurance products to its customers in Singapore."

Shares of the British lender were off 0.4% in London.

Defense stocks were rising in Friday trading due to the Trump administration's stated determination to take over Greenland as European troops are deployed to the island. The companies were also up following the European Union's 90 billion-euro ($104.8 billion) loan to Ukraine to defend against Russian attacks.

Shares of BAE Systems and Rolls Royce gained 2.3% and 1% respectively on the FTSE 100, while Thales rose 2.5% in Paris, and Germany's Rheinmetall gained 0.6% in Frankfurt.

Luxury stocks slumped in Paris, as Kering and EssilorLuxottica fell 4.2% and 3.9% respectively, while Louis Vuitton and Hermes International dropped 2.6% and 2.1% respectively.

Automotive stocks were also tracking lower as automakers Renault and Stellantis dropped 3% and 2.9% in Paris, while tire maker Continental and automaker Volkswagen lost 2.2% and 1.4% respectively on the DAX, while BMW and Porsche were down 1.5% and 1.4% respectively.