European markets rise at open; sterling weakens on easing UK inflation

Indices

European equity markets are trading near record or multi-year highs, reflecting underlying resilience but also clear tactical consolidation as investors navigate macroeconomic and policy crosscurrents. The FTSE MIB (FTSEMIB.MI) is showing notable strength, quoted at 44.2K, up 205.92 and maintaining a STRONG_LONG micro-trend, signaling continued institutional buy interest, particularly in banking and energy. The DAX Performance Index (^GDAXI) trades at 24.14K, registering a modest 65.02 gain but tracking a FLAT trend, indicating market indecision following recent advances.

France’s CAC 40 (^FCHI) is currently at 8.13K, with a small 19.84 uptick and a FLAT trend, mirroring investor caution amid political uncertainties. The FTSE 100 (^FTSE) stands at 9.77K, posting a 88.32 increase and also exhibiting a FLAT trend, suggesting UK markets are pausing after recent gains.

Spain’s IBEX 35 (^IBEX) posts fresh highs at 16.96K, up 38.2, underpinned by strong banking and resources performance, though the short-term trend remains FLAT. The Euro STOXX 50 (^STOXX50E) is quoted at 5.73K, rising by 14.05 and maintaining a STRONG_LONG signal, which underlines ongoing bullish conviction in Eurozone blue-chip stocks. This constellation of trends suggests tactical buy opportunities in the FTSE MIB and Euro STOXX 50, while FLAT signals in other indices call for patience and selectivity.

Stocks

Today’s market action is defined by pronounced sector rotation. Banking and basic resources are clear outperformers, with Spanish banks Sabadell and Caixabank delivering year-to-date returns of 67 and 47, respectively, fueling IBEX 35 resilience. Steel producers like ArcelorMittal, Aperam, Thyssenkrupp, and SSAB have each gained over 3, buoyed by favorable regulatory changes in steel import quotas. In contrast, automotive and technology sectors remain under pressure: BMW (BMW:GR) has fallen 8.9 after a weak earnings outlook, while French banks Société Générale, Crédit Agricole, and BNP Paribas have reported losses, weighing on the CAC 40. Inditex (ITX.MC) stands out with a 7 surge following strong winter sales, helping propel the IBEX 35 to record highs.

Economic News

Recent macroeconomic data present a nuanced but generally constructive backdrop for European equities. Spain’s GDP growth slowed to 0.6 from 0.8, and year-over-year retail sales growth eased to 4.2, 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 remains subdued, with the Eurozone CPI at 2.1, reducing the immediate pressure on the European Central Bank to tighten policy. The European Commission’s upward revision of its 2025 eurozone growth forecast to 1.3 from 0.9 further supports the region’s economic outlook.

Economic Events

The week’s macroeconomic calendar is dense, with several high-impact events set to shape trading. Key data releases include Eurozone Industrial Production, GDP figures for Germany and the Eurozone, Germany’s ZEW Economic Sentiment Index, and France’s Consumer Price Index. For the IBEX 35, Spain’s Producer Price Index, Consumer Confidence, and Retail Sales data are especially relevant. Central bank meetings are in sharp focus, particularly the upcoming European Central Bank session and the U.S. Federal Reserve’s FOMC meeting, where a widely anticipated 25 basis point rate cut could drive significant volatility in rate-sensitive sectors and global risk assets.

Market Sentiment

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

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