European markets closed mostly lower, except Milan and London. The Euro Stoxx 50 eased on weakness in autos and energy

Indices

European equity markets are trading at or near their annual highs, buoyed by strong institutional flows, yet they are showing signs of caution and selective consolidation. The FTSE MIB Index (FTSEMIB.MI) is currently quoted at 43192.12, reflecting only a modest dip on the day and maintaining a pronounced strong-long technical trend. This movement suggests persistent upside momentum and resilient demand for Italian equities.

The DAX Performance Index (^GDAXI) is trading at 23920.58, down slightly but exhibiting a flat micro-trend, indicating a period of near-term consolidation as investors digest recent gains. France’s CAC 40 (^FCHI) stands at 8061.02, also showing a minor decrease and a flat technical signal, reflecting ongoing caution amid domestic political developments.

The FTSE 100 (^FTSE) is at 9709.92, registering a marginal gain but remaining in a flat trend as energy and financials support the index, yet broader prudence prevails. Spain’s IBEX 35 (^IBEX) trades at 16019.5, hovering just below its annual peak and pausing after sustained banking sector strength. The Euro STOXX 50 (^STOXX50E) prints 5654.43, with a strong-long trend, signaling ongoing institutional inflows and robust conviction in Eurozone blue chips.

Buy signals are reinforced for the FTSE MIB Index (FTSEMIB.MI) and Euro STOXX 50 (^STOXX50E), both of which maintain strong-long technical trends and positive momentum. In contrast, the DAX Performance Index (^GDAXI), CAC 40 (^FCHI), FTSE 100 (^FTSE), and IBEX 35 (^IBEX) are exhibiting flat trends, indicating a pause and potential range-bound behavior in the near term.

Stocks

Sector rotation remains the dominant theme, with banking and basic resources driving outperformance. Steelmakers such as ArcelorMittal (MT:MT), Aperam (APAM.AS), Thyssenkrupp (TKAG.DE), and SSAB (SSABa.ST) have each advanced by over 3, fueled by favorable changes to European steel import quotas. Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) have delivered impressive year-to-date returns of 67 and 47, supporting sustained outperformance in the IBEX 35.

Conversely, the automotive and technology sectors are under pressure. BMW (BMW:GR) is down 8.9 after disappointing earnings, while ASML Holding N.V. (ASML) and ASM International (ASMI.AS) remain weighed down by renewed chip export restrictions. French banks Société Générale (GLE), Crédit Agricole (ACA), and BNP Paribas (BNP) have also posted declines, contributing to recent softness in the CAC 40. These sectoral moves suggest momentum and breakout strategies in banking and resources, while advocating defensive postures in autos and tech.

Economic News

Recent macroeconomic data continues to shape market sentiment. Spain’s quarterly GDP growth slowed to 0.6, down from 0.8, moderating IBEX 35 enthusiasm. Spanish Industrial Production YoY (August) outperformed at 3.4 versus 2.7. Spain’s trade balance deteriorated to -6 from -4.01, which could temper further upside.

Eurozone consumer confidence improved by 0.7 to -14.2, exceeding expectations and signaling a firmer outlook for consumption-driven sectors. Sector performance is mixed: mining stocks are up 1.7, healthcare is up 0.4, while telecom and utilities are down -1 and -0.6, showing a shift toward cyclicals.

Economic Events

This week features a packed macroeconomic calendar that could drive volatility. Key releases include Eurozone Industrial Production and GDP figures, Germany’s ZEW Economic Sentiment Index, and France’s Consumer Price Index, which will be pivotal for gauging the region’s growth and inflation trends. The European Central Bank is set to announce its interest rate decision on November 7, 2025, while the Federal Reserve’s meeting minutes are also due, both of which could impact liquidity conditions and risk appetite. Spanish government bond auctions and the upcoming EU Consumer Confidence data, estimated at 85 (up from 82.9), are additional focal points.

Market Sentiment

Overall sentiment across European indices is one of cautious optimism. Capital continues to flow into blue-chip benchmarks such as the Euro STOXX 50 (^STOXX50E) and FTSE MIB Index (FTSEMIB.MI), supported by expectations of stable credit conditions and accommodating central bank policies. The tactical sector-rotational approach remains evident, with banks and basic resources leading, while autos and technology lag due to sector-specific headwinds. Despite ongoing geopolitical and regulatory uncertainties, the prevailing technical and macroeconomic backdrop is constructive, suggesting continued potential for upside in leading indices. However, prudence is warranted as markets await key economic data releases and central bank guidance.

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