European markets close higher on Thursday after central bank announcements

Indices

The main European indices are exhibiting resilience and sustained upside, with several trading at or near record highs. The FTSE MIB Index (FTSEMIB.MI) is currently at 44.43K, up by 0.74, and maintains a “STRONG_LONG” micro-trend, signaling robust institutional flows and ongoing buy interest—especially in banking and energy. The DAX Performance Index (^GDAXI) stands at 24.19K, rising 0.96, but with a FLAT trend indicative of consolidation after previous advances. France’s CAC 40 (^FCHI) is at 8.15K, up 0.8, and also shows a FLAT trend, reflecting investor caution amid political uncertainty.

The FTSE 100 (^FTSE) trades at 9.84K, up 0.65, and continues its FLAT trend, suggesting a tactical pause as the market digests recent gains and awaits fiscal signals from the UK. Spain’s IBEX 35 (^IBEX) sits at 17.13K, up 1.12 and at fresh record highs, supported by banking and basic resources, though its micro-trend is FLAT, indicating consolidation. The Euro STOXX 50 (^STOXX50E) is at 5.74K, up 1.02 and maintains a STRONG_LONG signal, underlining persistent bullish conviction in Eurozone blue chips. This landscape suggests continued buy opportunities in the FTSE MIB and Euro STOXX 50, while the other indices’ flat trends advocate for patience and selective positioning.

Stocks

European equity action is marked by pronounced sector rotation. The banking and basic resources sectors are leading, with Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) achieving year-to-date returns of 67 and 47, respectively. Steelmakers such as ArcelorMittal, Aperam, Thyssenkrupp, and SSAB have each risen more than 3, buoyed by favorable regulatory changes in steel import quotas. Inditex (ITX.MC) has outperformed, surging 7 following strong winter sales, which is a key driver behind the IBEX 35’s record performance.

Conversely, the automotive and technology sectors are under pressure. BMW (BMW:GR) has declined 8.9 after weak earnings guidance, and French banks Société Générale, Crédit Agricole, and BNP Paribas have reported losses, weighing on the CAC 40. Upgrades for industrials such as Schneider Electric and Siemens Energy have also fueled notable gains, suggesting that traders may find more opportunities in industrial and banking names as positive sentiment and recent upgrades could drive further upside.

Economic News

Recent macroeconomic data presents a mixed but overall constructive backdrop for European equities. Spain’s GDP growth rate has slowed to 0.6, down from 0.8, and retail sales year-over-year have softened to 4.2, indicating persistent but slower expansion. Eurozone consumer confidence improved by 0.7 to -14.2, beating expectations and supporting consumption-driven sectors. The latest Eurozone CPI is at 2.1, reducing immediate pressure for policy tightening.

On the policy front, the ECB has maintained its benchmark deposit rate at 2 for the fourth consecutive meeting, reflecting a balance between persistent inflation and modest growth. President Lagarde emphasized a meeting-by-meeting approach, while market participants continue to monitor central bank signals for future guidance.

Economic Events

The macroeconomic calendar is dense this week, with several high-impact releases likely to influence trading. Market participants are closely watching 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 especially relevant for IBEX 35 performance. The upcoming European Central Bank meeting on December 18, 2025, is particularly pivotal, as updated inflation forecasts and potential policy adjustments could significantly sway risk assets.

Market Sentiment

Across the continent, overall sentiment is described as cautiously optimistic. Sustained capital inflows into blue-chip indices such as the Euro STOXX 50 (^STOXX50E) and FTSE MIB Index (FTSEMIB.MI) are supported by stable credit conditions and expectations of continued accommodative central bank policies. The outperformance in banking and basic resources sectors has helped offset persistent weakness in autos and technology, leading investors toward a tactical, sector-rotational approach. The prevalence of FLAT trends in several key indices signals a wait-and-see stance as traders remain vigilant ahead of major economic and policy announcements, favoring selective positioning and risk management.

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