European markets rise as global sentiment stabilizes after crypto and metals sell-off

Indices

The FTSE MIB is currently trading at 45.66K, up 1.00% from its previous close, marking its highest level in 25 years, which underscores strong upward momentum. Similarly, the DAX is at 22.03K, a 0.63% gain, having recently set a new all-time high, reflecting persistent bullish sentiment in German equities. The CAC 40 shows moderate gains, up 0.39% at 7.2K, led by strength in automotive and aerospace sectors. The FTSE 100 trades at 7.5K, up 0.80%, with aerospace stocks contributing significantly to the rally. Meanwhile, the IBEX 35 records minimal movement, up just 0.03% at 9.2K, indicating a neutral sentiment, while the EURO STOXX 50 posts a modest 0.12% increase at 4K.

Technical indicators are broadly bullish, with the FTSE MIB showing a "Strong Buy" signal and the DAX maintaining a clearly bullish trend. The CAC 40 and FTSE 100 are also benefiting from sector-specific "Buy" signals, especially in aerospace and automotive, while the IBEX 35's "Hold" signal suggests investors are awaiting clearer direction.

Stocks

Today's market action highlights several stocks driving index performance. On the FTSE MIB, Telecom Italia (TLIT) leads in activity with 133.66M at €0.57 (+0.74%), and Intesa Sanpaolo SpA (ISP) trades 58.3M at €5.97 (+2.16%). Campari (CPRI) and Mediobanca (MDBI) emerge as top gainers, up 2.96% and 2.83%, respectively, while Fincantieri (FCT) and Azimut Holding (AZMT) are the leading decliners.

In Germany, MTU Aero Engines AG and Airbus are notable gainers, rising 2.67% and 1.99%, reflecting sectoral momentum in aerospace. France’s Stellantis NV and Safran are up 2.59% and 2.29%, leading the CAC 40, while L'Oréal and Danone see slight declines.

The FTSE 100 is bolstered by Fresnillo and Melrose, up 4.74% and 3.22%, indicating investor preference for materials and industrials, while B&M European Value and British American Tobacco lag. These movements suggest continued rotation into sectors with perceived resilience and growth prospects, particularly aerospace, industrials, and select consumer stocks.

Economic News

Recent economic releases and headlines have shaped market sentiment across Europe. Germany's annual inflation rate decreased to 1.8% from 2.3% previously, which could support a more accommodative stance from the European Central Bank and enhance equity market appeal. Geopolitical developments, notably the U.S. intervention in Venezuela and the capture of President Nicolás Maduro, have generated short-term uncertainty, potentially affecting global risk appetite and energy prices. Additionally, volatility in the technology sector, such as the reversal in Nvidia shares after strong Q3 results, underscores lingering concerns over high valuations and sector-specific risks.

Economic Events

This week’s calendar features several key events likely to drive market action. On February 2, construction spending, ISM manufacturing data, and Treasury auctions will shed light on economic activity and investor demand for sovereign debt. February 3 will see JOLTS Job Openings and multiple Treasury auctions, while February 4 brings ISM Services reports and the 3-Year Note auction. February 5 features preliminary productivity data and additional Treasury offerings. These releases will be closely watched for signals on economic growth, inflation, and monetary policy prospects, with potential spillover effects across indices, currencies, and risk assets.

Market Sentiment

Market sentiment remains cautiously optimistic, underpinned by record highs and sectoral strength in areas like aerospace, automotive, and telecommunications. Positive momentum in the FTSE MIB and DAX highlights investor confidence, though mixed performances in other indices and some profit-taking in defensive sectors point to a more balanced risk appetite. The moderation in German inflation and expectations for supportive monetary policy further sustain the bullish outlook, though ongoing geopolitical tensions and sector-specific valuation concerns prompt vigilance. Investors are expected to remain attentive to upcoming economic releases and earnings season developments to confirm the durability of the current trend.

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