European markets close in the green; the Swiss central bank keeps interest rates at 0% as inflation cools

Indices

The major European indices are trading near multi-year or record highs, reflecting sustained upward momentum in select benchmarks but also signaling tactical consolidation in others. The FTSE MIB Index (FTSEMIB.MI) stands out, trading at 43.75K, up 279.89 points (0.64), and exhibiting a strong upward trend, particularly fueled by banking and energy names. This movement suggests ongoing institutional inflows and robust buy interest in Italian equities.

The DAX Performance Index (^GDAXI) trades at 24.3K, reflecting a gain of 172.14 points (0.71), but with a flat micro-trend, indicating a consolidation phase after prior strength.

The CAC 40 (^FCHI) is at 8.08K, up 62.16 points (0.77), but also displaying a flat trend, reflecting investor caution amid political uncertainties.

The FTSE 100 (^FTSE) posts 9.7K, with a modest rise of 44.61 points (0.46), and a flat short-term trend, suggesting a tactical pause as investors digest recent gains.

Spain’s IBEX 35 (^IBEX) is trading at 16.91K, gaining 149.9 (0.89) and remaining above key moving averages, highlighting constructive long-term momentum but a flat short-term trend.

The Euro STOXX 50 (^STOXX50E) is at 5.76K, up 48.96 (0.86), maintaining a strong long trend, underlining ongoing bullish conviction in Eurozone blue chips. The technical setup favors continued buy opportunities in the FTSE MIB and Euro STOXX 50, while flat trends in other indices suggest investors are awaiting further catalysts.

Stocks

Sector rotation is a defining feature of today’s market landscape. Banking and basic resources are clear outperformers, with Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) delivering year-to-date returns of 67 and 47, fueling IBEX 35 resilience. Steelmakers like ArcelorMittal, Aperam, Thyssenkrupp, and SSAB have each advanced over 3, buoyed by regulatory changes to steel import quotas. Inditex (ITX.MC) surged 7 after strong winter sales, supporting IBEX’s record performance.

Conversely, automotive and technology sectors face pressure. BMW (BMW:GR) has dropped 8.9 following a weak earnings outlook, while French banks Société Générale, Crédit Agricole, and BNP Paribas have reported declines, weighing on the CAC 40. SAP (SAP) fell 2.6 in response to Oracle’s results, reigniting concerns about the profitability of AI investments.

Among single-stock highlights, Schneider Electric climbed 3.8 after announcing a €3.5 billion share buyback through 2030, while Delivery Hero dropped 5.6 following a downgrade. Naturgy was down 5.4 after BlackRock sold a significant stake, highlighting continued volatility on stock-specific news.

Economic News

Recent macroeconomic data paints a generally constructive, though nuanced, backdrop for European equities. Eurozone inflation remains contained at 2.1, easing pressure for immediate policy tightening by the European Central Bank (ECB). Spain’s GDP growth has slowed to 0.6 from 0.8, and retail sales year-over-year eased to 4.2 from 4.7, suggesting some cooling in consumer demand. However, Eurozone consumer confidence improved by 0.7 to -14.2, surpassing expectations and lending support to consumption-driven sectors.

The Swiss National Bank (SNB) has maintained its policy rate at 0, citing low inflationary pressure and a stable economic outlook, with economists expecting rates to remain unchanged through 2026. The ECB has also proposed regulatory changes to simplify EU banking capital rules while maintaining overall capital levels, which may further enhance sector resilience.

Economic Events

This week’s macroeconomic calendar is dense. Key events include the ECB’s monetary policy meeting on December 12, 2025, which is expected to feature updated inflation forecasts and potential policy adjustments that could sway risk assets. Other notable events are the release of the Swiss Consumer Price Index for November on December 15, as well as Eurozone Industrial Production and GDP figures. Central bank communications, especially from the ECB and the SNB, are in focus and may drive volatility in rate-sensitive sectors.

Market Sentiment

Overall market sentiment across Europe is cautiously optimistic. Sustained capital inflows into blue-chip indices such as the Euro STOXX 50 and FTSE MIB are supported by expectations of accommodative central bank policies and stable credit conditions. Outperformance in banking and basic resources sectors is helping offset persistent weakness in autos and technology, fostering a tactical, sector-rotational approach among investors. However, with several key indices showing flat short-term trends, a wait-and-see stance prevails as market participants remain vigilant ahead of major economic and policy announcements. The resilience of leading benchmarks, combined with supportive macroeconomic signals, points to further upside potential, though vigilance is warranted.

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