European markets open lower on final trading day of the year

European markets opened lower on Thursday, the final trading day of the year.

The pan-European Stoxx 600 index opened 0.3% lower on New Year's Eve, with all sectors in negative territory apart from Retail. London's FTSE index was down 1.3% on the final day that the U.K. is a de-facto member of the EU's single market and customs union before Brexit is definitively implemented.

European will end 2020 on a somber note, following lackluster end-of-year trade in Asia and with U.S. stock futures largely flat early Thursday morning. All markets in Europe will close early, by 1 p.m. London time.

Shares in Asia-Pacific were mixed on Thursday, as multiple markets in the region also closed early for New Year's Eve. Chinese shares rose in afternoon trade, however, after China said its factory activity expanded in December.

In addition, it was announced Wednesday that China and the EU had agreed to an investment deal that will give firms in Europe more access to Chinese markets. Negotiations had stalled earlier this year prior to the U.S. presidential election in November.

Meanwhile, European markets could react on Thursday to a new swipe against Europe from the U.S. On Wednesday, U.S. trade officials said they were increasing tariffs on certain EU products, including aircraft-related parts and wines from France and Germany, Reuters reported. The move is the latest action in a 16-year dispute over civil aviation subsidies involving Europe-based Airbus and its U.S.-based competitor Boeing.

Thursday marks the last day of the post-Brexit transition period for the U.K. and the EU. From January 1, new trading arrangements begin between the two sides after a post-Brexit trade deal was ratified by the U.K. Parliament on Wednesday.

The U.K. will now be out of the EU's single market and customs union, but the deal means that neither side will impose import tariffs on each other's goods. The European Parliament is expected to ratify the deal in the New Year.

There are no major earnings or data releases Thursday.

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