European markets closed in negative territory: the DAX and the IBEX ended the session down more than one percent

Indices

The main European indices are showing signs of short-term consolidation following a period of strong gains, with most benchmarks trading slightly lower today but remaining near their recent highs. The FTSE MIB Index (FTSEMIB.MI) is currently at 43693.19, down -0.68531, suggesting a mild pullback after recent outperformance; notably, its micro-trend remains classified as STRONG_LONG, which implies underlying strength and a possible continuation of the rally in the medium term.

The DAX Performance Index (^GDAXI) trades at 23546.08, down -1.38408, reflecting a short-term correction after setting fresh highs earlier this month. The CAC 40 (^FCHI) stands at 8119.02, with a daily drop of -0.62508, indicative of some profit-taking but still within a bullish overall structure.

The FTSE 100 (^FTSE) is trading at 9675.37, down -0.23715, stabilizing after touching record highs, indicating ongoing resilience supported by improving sentiment around global macro risks. Spain's IBEX 35 (^IBEX) is at 16159.4, down -1.14096, but remains well above its 50-day and 200-day averages, suggesting that the underlying trend remains constructive.

The Euro STOXX 50 (^STOXX50E) is quoted at 5632.9, registering a daily decline of -1.06906, but retains a STRONG_LONG, reflecting robust medium-term momentum. Overall, the technical picture for European indices is one of a temporary pause amid an ongoing uptrend, with a bias toward buying on dips in the absence of major negative catalysts.

Stocks

Sector rotation remains evident in European equities, with healthcare and luxury names attracting increased trading activity. Healthcare stocks are outperforming, buoyed by positive brokerage commentary, while luxury conglomerates such as LVMH (MC) are advancing on expansion prospects and sustained consumer demand. Vodafone Group plc (LSE: VOD) rose by 4 after upgrading full-year earnings and cash flow targets, highlighting sector-specific catalysts.

Conversely, some financial institutions have lagged, and specific cases such as Deutsche Boerse AG (ETR: DB1) have experienced sharp drops—up to 7.3—following the launch of an EU antitrust probe. This move underscores regulatory risk as a source of volatility for exchange operators and select financials. In the telecom sector, INWIT S.p.A. (BIT: INW) fell 8.4 after revising down revenue guidance, despite improved quarterly profits.

These sector moves suggest that while broad indices are consolidating, active stock selection remains crucial. Investors may consider overweighting healthcare and luxury sectors while exercising caution in financials, particularly those facing regulatory scrutiny.

Economic News

Recent economic headlines have played a significant role in market movements. The approval of a temporary US government funding bill, ending a record 43-day shutdown, has spurred relief rallies across European indices, contributing to the recent string of record highs. Optimism around de-escalating US-China trade tensions and new German fiscal stimulus have further supported the DAX and broader risk appetite.

On the regulatory front, the European Commission's investigations into Deutsche Boerse AG and Nasdaq Inc. have pressured these stocks, demonstrating how legal and antitrust developments can quickly disrupt sentiment in specific sectors. Additionally, the ongoing inquiry into potential market distortion involving China’s CRRC in a Lisbon railway bid reveals heightened scrutiny on foreign subsidies and competition policy within the EU, which may influence future cross-border investment and industrial stocks.

Economic Events

A packed calendar of European Central Bank (ECB) speeches and meetings is set to influence sentiment this week. Notably, the ECB De Guindos Speech and the release of the European Commission Autumn Forecasts are expected to provide valuable signals on monetary policy and the broader economic outlook. Mid-week, attention will turn to the ECB Non-Monetary Policy Meeting and a slate of inflation and labor cost index data, including the HICP YoY (previous: 2.4, estimate: 2.4) and Core Inflation Rate YoY (previous: 2.4, estimate: 2.4), which are likely to shape expectations for future ECB policy shifts. A high-impact event will be the release of the October CPI (estimate: 129.7), closely watched for signs of inflation persistence or easing.

Market Sentiment

Market sentiment across Europe remains broadly constructive despite today’s modest pullback, underpinned by optimism over macro-political developments and robust corporate earnings. The positive impact of the US government shutdown resolution, expectations for de-escalating US-China trade tensions, and anticipation of supportive ECB communications have fostered a risk-on environment. However, the emergence of regulatory investigations and sector-specific disappointments (notably in financials and telecoms) serve as reminders of ongoing volatility and the importance of monitoring event risk. The prevailing environment favors a “buy the dip” approach in leading sectors, particularly healthcare and luxury, while maintaining vigilance for potential negative surprises.

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