Negative session for European stock markets, including Milan, as investors focus on quarterly earnings

Indices

Major European indices are currently trading near or just below their record highs, reflecting sustained institutional inflows and resilience across the continent. The FTSE MIB Index (FTSEMIB.MI) is trading at 42413.79, supported by a -0.54982 and displaying a strong long-term bullish trend. The DAX Performance Index (^GDAXI) stands at 24284.95, showing a modest -0.18529 and maintaining resilience among German blue chips. France’s CAC 40 (^FCHI) is currently at 8217.18, with a slight positive movement of 0.13539, reflecting cautious optimism.

The FTSE 100 (^FTSE) is trading at 9469.19, up 0.44765, supported by energy and financial stocks. Spain’s IBEX 35 (^IBEX) is at 15776.9, with a modest increase of 0.06215474, maintaining a bullish undertone just off its annual peak. The Euro STOXX 50 (^STOXX50E) stands at 5655.55, down -0.55004 but maintaining a strong long-term bullish signal, indicative of persistent institutional demand.

Short-term momentum is “strong long” for the FTSE MIB and Euro STOXX 50, while other indices show flat to moderately positive signals. This structure favors trend-following strategies focused on outperforming benchmarks.

Stocks

Sector rotation remains a dominant theme in the European equity landscape. Basic resources and banking stocks are leading the rally, with steelmakers such as ArcelorMittal (MT:MT), Aperam (APAM.AS), Thyssenkrupp (TKAG.DE), and SSAB (SSABa.ST) each advancing over 3, propelled by changes to European steel import quotas. Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) have delivered remarkable year-to-date gains of 67 and 47, respectively, further buoying the IBEX 35.

Conversely, automotive stocks such as BMW (BMW:GR) are under pressure, falling 8.9 after a negative earnings outlook. Technology leaders like ASML (ASML.AS) and ASMI (ASMI.AS) have also faced modest losses due to renewed chip export restrictions. French banking stocks, including Société Générale (GLE), Crédit Agricole (ACA), and BNP Paribas (BNP), have declined, exerting downward pressure on the CAC 40. Trading strategies should currently emphasize momentum in basic resources and banking, while remaining defensive in automotive and technology sectors.

Economic News

Recent economic data have reinforced positive sentiment in European equities. Spain’s Industrial Production Year-over-Year for August registered at 3.4, surpassing the previous 2.7, signaling robust industrial activity and directly boosting the IBEX 35. Euronext’s record fixed-income trading revenues in Q1 2025 highlight strong market participation and volatility, benefiting resource and banking sectors. Policy changes, such as the European Commission’s adjustment to steel import quotas, have supported resource stocks, while French banking equities remain pressured by regulatory uncertainty and political risks.

Economic Events

This week, key macroeconomic releases include Eurozone Industrial Production and GDP data, Germany’s ZEW Economic Sentiment Index, and France’s CPI. Central bank meeting minutes from both the Federal Reserve and European Central Bank are highly anticipated and could influence the trajectory of interest rates and rate-sensitive sectors. Additionally, Spanish government bond auctions—recently showing easing funding costs—contribute to a constructive outlook for sovereign debt and broader risk assets.

Market Sentiment

Market sentiment across European equities is cautiously optimistic. Sustained inflows into blue-chip indices, particularly the Euro STOXX 50, are propelled by expectations of improving credit conditions and supportive central bank stances. Outperformance in basic resources and banking is counterbalanced by continued weakness in autos and technology, reflecting a tactical, sector-rotational approach among investors. Despite short-term headwinds from political and regulatory uncertainties, the technical and fundamental backdrop remains constructive, favoring further gains in core European indices.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.