European markets gain at the open as focus turns to upcoming central bank meetings

Indices

Major European indices are exhibiting a combination of resilience and tactical consolidation, with several benchmarks trading near record or multi-year highs. The FTSE MIB Index (FTSEMIB.MI) is currently quoted at 43.93K, registering a gain of 419.17 or 0.96, and maintains a STRONG_LONG micro-trend, signaling robust institutional flows and ongoing buy interest, particularly in banking and energy. The DAX Performance Index (^GDAXI) is trading at 24.26K, up 72.17 or 0.3, but shows a FLAT micro-trend, indicating a pause after recent advances.

The CAC 40 (^FCHI) stands at 8.14K, posting a gain of 72.46 or 0.9, and retains a FLAT trend, reflecting investor caution amid political uncertainties. The FTSE 100 (^FTSE) is at 9.71K, with a 65.1 or 0.67, and a FLAT short-term trend, suggesting a tactical pause as UK markets digest recent gains.

Spain’s IBEX 35 (^IBEX) trades at 17.01K, up 156.6 or 0.93, setting fresh record highs with a FLAT micro-trend, indicative of consolidation at elevated levels. The Euro STOXX 50 (^STOXX50E) is quoted at 5.75K, up 28.89 or 0.51, and maintains a STRONG_LONG signal, highlighting ongoing bullish conviction in Eurozone blue chips. This alignment of trends suggests potential buy opportunities in the FTSE MIB and Euro STOXX 50, while other indices' flat signals advocate for patience and selective positioning.

Stocks

Sector rotation is a defining feature of today’s market landscape. The banking and basic resources sectors are leading gains, with Spanish banks such as Sabadell (SABE.MC) and Caixabank (CABK.MC) delivering impressive year-to-date returns of 67 and 47, fueling the IBEX 35’s resilience. Steelmakers such as ArcelorMittal, Aperam, Thyssenkrupp, and SSAB have each advanced over 3, benefitting from regulatory changes to steel import quotas. Inditex (ITX.MC) surged 7 amid robust winter sales, supporting IBEX 35’s record performance.

Conversely, the automotive and technology sectors are under pressure. BMW (BMW:GR) has dropped 8.9 after 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 AI investment profitability. Schneider Electric rose 3.8 after announcing a major share buyback, while Delivery Hero fell 5.6 following a downgrade. This bifurcation in sector performance suggests opportunities in banking and basic resources, while caution is warranted in autos and tech.

Economic News

Recent macroeconomic data offers a mixed but generally constructive backdrop for European equities. Spain’s GDP growth slowed to 0.6 from 0.8, and retail sales growth eased to 4.2 from 4.7, indicating some cooling in consumer demand. However, Eurozone consumer confidence improved by 0.7 to -14.2, surpassing expectations and supporting consumption-driven sectors. Inflation in the Eurozone remains contained, with CPI at 2.1, easing pressure on the European Central Bank for immediate policy tightening.

Economic Events

The economic calendar is dense this week, with several high-impact events on the horizon. Key data releases include Eurozone Industrial Production, regional and German GDP figures, Germany’s ZEW Economic Sentiment Index, and France’s Consumer Price Index. In Spain, the Producer Price Index, Consumer Confidence, and Retail Sales figures are particularly relevant for the IBEX 35. Central bank meetings, especially the upcoming European Central Bank session and the U.S. Federal Reserve’s FOMC meeting, are in sharp focus. The market anticipates a 25 basis point rate cut from the Federal Reserve, with ECB policy expected to remain unchanged, both of which could drive significant volatility in rate-sensitive sectors.

Market Sentiment

Market sentiment across Europe is cautiously optimistic. Sustained capital inflows into blue-chip indices such as the Euro STOXX 50 (^STOXX50E) and FTSE MIB Index (FTSEMIB.MI) are underpinned by stable credit conditions and expectations of accommodative central bank policies. Outperformance in banking and basic resources is helping offset persistent weakness in autos and technology, encouraging a tactical, sector-rotational approach among investors. However, the prevalence of FLAT trends in several key indices signals a wait-and-see stance as market participants remain vigilant ahead of major economic and policy announcements. This environment favors selective positioning and risk management, while retaining an overall constructive view on leading benchmarks.

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