European markets open in negative territory: Milan’s Piazza Affari starts the session down 0.41%

Indices

Major European indices are trading near their annual or all-time highs, reflecting robust institutional support but also emerging signs of consolidation and selectivity. The FTSE MIB Index (FTSEMIB.MI) is currently at 43260.1, posting a slight decline of -0.41067 but maintaining a pronounced "strong long" technical trend. This movement suggests persistent upside momentum and resilient demand, especially for Italian equities.

The DAX Performance Index (^GDAXI) trades at 23968.41, down -0.33817, and shows a flat short-term trend, signifying near-term consolidation after recent record gains. France’s CAC 40 (^FCHI) stands at 8020.73, declining -0.6626, with a flat trend reflecting market caution amid domestic political uncertainties.

The FTSE 100 (^FTSE) is at 9772.64, registering a marginal decrease of -0.04541233 and maintaining a flat micro-trend, as advances in energy and finance are counterbalanced by investor prudence. Spain’s IBEX 35 (^IBEX) is posted at 16042.2, down -0.3491, hovering just below its annual peak, with momentum moderating after recent macroeconomic data.

The Euro STOXX 50 (^STOXX50E) prints 5649.11, decreasing by -0.35314, but sustaining a "strong long" trend, signaling robust conviction and broad-based inflows into Eurozone blue chips. The current technical backdrop favors momentum-oriented strategies in the FTSE MIB and Euro STOXX 50, while the flat trends in the DAX, CAC 40, FTSE 100, and IBEX 35 point to a selective, range-bound trading environment.

Stocks

Sector rotation continues to drive European equity performance. Banking and basic resource stocks are at the forefront, with steelmakers such as ArcelorMittal (MT:MT), Aperam (APAM.AS), Thyssenkrupp (TKAG.DE), and SSAB (SSABa.ST) each advancing over 3 on favorable changes to European steel import quotas. Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) have delivered outstanding 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) saw a decline of 8.9 after a disappointing earnings outlook, while ASML (ASML.AS) 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 reported declines, contributing to a defensive posture within the CAC 40.

Economic News

Recent economic data continues to shape sentiment and sector allocation. In Spain, Q3 GDP growth slowed to 0.6, down from 0.8, slightly tempering enthusiasm for the IBEX 35. Retail sales year-over-year in September softened to 4.2, down from 4.7, indicating a modest cooling in consumer demand. Eurozone consumer confidence improved by 0.7 to -14.2, surpassing expectations and providing a firmer outlook for consumption-driven sectors.

The European Central Bank has kept its deposit rate steady at 2, reinforcing expectations for stable credit conditions into 2025 and offering continued support for risk assets.

Economic Events

This week is marked by several high-impact macroeconomic releases that could shape volatility and direction. Key data includes upcoming Eurozone Industrial Production and GDP figures, the German ZEW Economic Sentiment Index, and France’s Consumer Price Index, all of which will be pivotal in gauging regional growth and inflation. Central bank policy meetings from the European Central Bank and the U.S. Federal Reserve are in focus, with their decisions likely to influence rate-sensitive sectors and overall risk appetite. Spanish government bond auctions, with recent results indicating easing funding costs, continue to support sovereign debt and risk assets. The forthcoming EU Consumer Confidence reading is estimated at 85, up from 82.9, potentially signaling further improvement in sentiment.

Market Sentiment

Overall sentiment across European equities is characterized by cautious optimism, underpinned by sustained capital inflows into blue-chip benchmarks such as the Euro STOXX 50 and FTSE MIB. This is driven by expectations of stable credit conditions and accommodating central bank policies. The outperformance of basic resources and banking sectors is offsetting persistent weakness in autos and technology, indicating a tactical, sector-rotational approach among investors. The prevailing technical and macroeconomic backdrop remains constructive, supporting further upside in leading indices, though near-term caution is warranted ahead of key economic and policy announcements.

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