European stock markets closed lower: the CAC 40, DAX, and EURO Stoxx all lost more than one percent

Indices

Major European indices are trading close to their annual or all-time highs, reflecting robust institutional support but also emerging sector selectivity and consolidation. The FTSE MIB Index (FTSEMIB.MI) is currently quoted at 43104.85, showing a decline of -0.76807 but maintaining a pronounced "strong long" technical trend—a clear indication of persistent upside momentum, especially within Italian equities. The DAX Performance Index (^GDAXI) trades at 23767.01, down -1.17561, and exhibits a flat trend, suggesting a period of near-term consolidation after strong previous gains.

France’s CAC 40 (^FCHI) stands at 7962.41, declining -1.3849, with a flat technical trend as political uncertainty weighs on sentiment. The FTSE 100 (^FTSE) registers 9729.1, down slightly by -0.49074 and holding a flat trend, as gains in energy and finance are offset by broad caution.

Spain’s IBEX 35 (^IBEX) is trading at 16117.7, up 0.11989 and hovering just below its annual peak, with momentum moderating following recent macroeconomic data. The Euro STOXX 50 (^STOXX50E) prints 5616.04, down -0.93648, but retains a "strong long" trend, a sign of robust conviction and broad-based inflows into Eurozone blue chips. The technical backdrop currently favors momentum-oriented strategies in the FTSE MIB and Euro STOXX 50, while the flat trends in Germany, France, the UK, and Spain point to a selective, range-bound trading environment.

Stocks

Sector rotation remains the central theme driving European equity performance. Banking and basic resource stocks are leading, with steelmakers such as ArcelorMittal (MT:MT), Aperam (APAM.AS), Thyssenkrupp (TKAG.DE), and SSAB (SSABa.ST) each advancing over 3, catalyzed by favorable changes to European steel import quotas. Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) have delivered exceptional year-to-date returns of 67 and 47, supporting the resilience of the IBEX 35.

Conversely, automotive and technology stocks are under pressure: BMW (BMW:GR) is down 8.9 after a weak earnings outlook, while ASML Holding N.V. (ASML) and ASM International (ASMI.AS) are 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 the defensive tone in the CAC 40. This sectoral configuration supports momentum and breakout strategies in banking and resources, while advocating defensive or wait-and-see approaches for autos and technology.

Economic News

Recent macroeconomic data continues to shape sentiment and sector allocation. In Spain, Q3 GDP growth slowed to 0.6 from 0.8, slightly tempering enthusiasm for the IBEX 35. Spanish retail sales year-over-year for September softened to 4.2 from 4.7, indicating a modest cooling in consumer demand. Nevertheless, 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 maintained its deposit rate at 2, reinforcing expectations for stable credit conditions into 2025. This policy stance, combined with easing funding costs seen at Spanish government bond auctions, continues to provide support for sovereign debt and 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 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. 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 (^STOXX50E) and FTSE MIB Index (FTSEMIB.MI). This is driven by expectations of continued stable credit conditions and accommodating central bank policies. The outperformance of basic resources and banking sectors is helping to offset 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.