European stock markets closed sharply higher, with Milan’s Piazza Affari leading the gains, ending the session up 2.38%

Indices

Major European indices are trading at or near their annual or all-time highs, demonstrating sustained institutional support but also signs of consolidation and selective positioning. The FTSE MIB Index (FTSEMIB.MI) is currently at 43939.55, up 2.38102, maintaining a pronounced "strong long" technical trend. This ongoing upside momentum signals robust demand for Italian equities, especially in banking and energy. The DAX Performance Index (^GDAXI) is trading at 23978.4, up 1.73288, but exhibits a flat micro-trend, indicating consolidation near record territory.

France’s CAC 40 (^FCHI) stands at 8066.22, up 1.45959, with a flat technical trend that reflects investor caution amid political developments. The FTSE 100 (^FTSE) is at 9789.06, up 1.09981, also showing a flat trend as advances in energy and finance are offset by general prudence. Spain’s IBEX 35 (^IBEX) is trading at 16181.3, up 1.76022, just below its annual peak, with momentum moderating after recent macroeconomic data. The Euro STOXX 50 (^STOXX50E) prints 5669.91, up 1.85717 and maintaining a strong long technical signal, attracting broad-based inflows into Eurozone blue chips. The technical landscape currently favors momentum strategies in Italy and pan-European indices, while other markets show a tendency for selective, range-bound trading.

Stocks

Sector rotation continues to dominate, with banking and basic resources leading market gains. Steelmakers such as ArcelorMittal (MT:MT), Aperam (APAM.AS), Thyssenkrupp (TKAG.DE), and SSAB (SSABa.ST) have each advanced over 3 following favorable changes to European steel import quotas. Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) report outstanding year-to-date returns of 67 and 47, underpinning IBEX 35 resilience. Conversely, automotive and technology sectors face headwinds—BMW (BMW:GR) is down 8.9 after a disappointing earnings outlook, while ASML (ASML.AS) and ASM International (ASMI.AS) are pressured by renewed chip export restrictions. French banks Société Générale (GLE), Crédit Agricole (ACA), and BNP Paribas (BNP) have posted declines, weighing on the CAC 40. In this environment, momentum and breakout strategies in banking and resources are favored, while defensive or wait-and-see positions are advisable in autos and technology.

Economic News

Recent macroeconomic releases show mixed signals. In Spain, Q3 GDP growth slowed to 0.6 from 0.8, tempering IBEX 35 enthusiasm. Retail sales year-over-year in September softened to 4.2 from 4.7, signaling 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. Political uncertainty in France, including the resignation of the prime minister, has introduced headline risk and contributed to recent market caution.

Economic Events

This week features several high-impact macroeconomic releases with the potential to drive volatility and direction. Key data includes Eurozone Industrial Production, GDP figures, the German ZEW Economic Sentiment Index, and France’s Consumer Price Index, all pivotal for gauging regional growth and inflation trends. Central bank policy meetings, especially from the European Central Bank and the U.S. Federal Reserve, are in focus, with outcomes likely to influence rate-sensitive sectors and the broader risk appetite. Spanish government bond auctions have shown easing funding costs, supporting both sovereign debt and risk assets. The upcoming EU Consumer Confidence reading is estimated at 85, up from 82.9, indicating possible further improvement in sentiment.

Market Sentiment

Overall sentiment remains cautiously optimistic across European equities. Sustained capital inflows into blue-chip benchmarks, especially the Euro STOXX 50 and FTSE MIB, are underpinned by expectations of stable credit conditions and accommodating central bank policies. Outperformance in basic resources and banking sectors is helping to offset persistent weakness in autos and technology, reinforcing a tactical sector-rotational approach among investors. The constructive technical and macroeconomic backdrop supports further upside in leading benchmarks, though near-term caution is warranted ahead of key policy and data announcements.

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