European stocks in red as ECB holds rates steady ahead of Lagarde’s press conference

Indices

The major European indices are trading near their all-time or annual highs, reflecting underlying institutional support and selective sector momentum. The FTSE MIB Index (FTSEMIB.MI) is currently trading at 43196.19, showing a modest decline of -0.10716 but exhibiting a “strong long” technical trend. This persistent bullish signal underlines robust buying interest, particularly in Italian equities. The DAX Performance Index (^GDAXI) stands at 24132.62 with a marginal rise of 0.03486125, consolidating near its record with a flat micro-trend, indicating investor caution and a wait-and-see approach.

France’s CAC 40 (^FCHI) is trading at 8151.77, showing a decrease of -0.59884 but remaining close to its annual peak. The FTSE 100 (^FTSE) is at 9758.35, nearly unchanged with a 0.0226524 gain, and continues to exhibit a flat trend, reflecting prudence after recent advances. Spain’s IBEX 35 (^IBEX) stands at 16027.4, down -0.75975, reflecting some pressure after softer macroeconomic data. The Euro STOXX 50 (^STOXX50E) is trading at 5695.45, with a minor loss of -0.18157 but maintaining a strong long-term bullish trend, signaling persistent confidence in eurozone blue chips.

Short-term technical signals continue to favor momentum strategies in the FTSE MIB and Euro STOXX 50, while the flat trends in the DAX, CAC 40, FTSE 100, and IBEX 35 suggest a range-bound, selective trading environment.

Stocks

Sector rotation is currently the dominant theme across European equities. 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 rising over 3 following favorable revisions to steel import quotas. Spanish banks such as Sabadell (SABE.MC) and Caixabank (CABK.MC) have delivered year-to-date gains of 67 and 47, supporting IBEX 35 resilience.

Conversely, the automotive and technology sectors face headwinds. BMW (BMW:GR) has dropped 8.9 on earnings disappointment, while ASML (ASML.AS) and ASMI (ASMI.AS) remain pressured by chip export restrictions. French banks Société Générale (GLE), Crédit Agricole (ACA), and BNP Paribas (BNP) have also reported declines, dragging on the CAC 40. The prevailing strategy is to favor momentum and breakout trades in banking and basic resources, while adopting a defensive or wait-and-see approach in autos and technology due to ongoing sector-specific risks.

Economic News

Recent macroeconomic data has produced mixed signals for European markets. In Spain, the GDP Growth Rate QoQ (Q3) was 0.6, a slowdown from 0.8, which may explain moderation in the IBEX 35. Retail Sales YoY (Sep) softened to 4.2, down from 4.7, signaling a cooling in consumer demand. Eurozone consumer confidence improved by 0.7 in October to -14.2, exceeding expectations and suggesting a firmer outlook for consumption-driven sectors.

Economic Events

This week’s calendar is packed with high-impact macroeconomic events, including Eurozone Industrial Production and GDP figures, the German ZEW Economic Sentiment Index, France’s CPI, and central bank meetings from both the European Central Bank and the U.S. Federal Reserve. The ECB has maintained its deposit rate at 2, supporting expectations for stable credit conditions into 2025. The outcome of these events is expected to influence rate-sensitive sectors, overall market trends, and risk appetite, particularly as traders look for guidance on future interest rate paths.

Market Sentiment

Sentiment across European equities is characterized by cautious optimism, sustained by capital inflows into blue-chip indices—especially the Euro STOXX 50 and FTSE MIB—on the back of supportive central bank policy and stable macroeconomic conditions. The outperformance of basic resources and banking is offsetting persistent weakness in autos and technology, illustrating a tactical, sector-rotational approach among investors. While the technical and macroeconomic backdrop remains constructive and points to further upside for leading indices, near-term caution is warranted given the density of upcoming economic releases and central bank announcements.

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