European equity markets concluded Wednesday's session predominantly in positive territory, as investors temporarily set aside tariff concerns, directing their attention towards corporate earnings and regional economic indicators.
Market participants closely assessed manufacturing and services activity data across various European nations. While concerns about a prolonged trade war linger, partly due to U.S. President Donald Trump's tariff rhetoric aimed at several major trade partners, the prospects for global economic growth remain uncertain.
The pan-European STOXX 600 index advanced by 0.47%. London's FTSE 100 rose by 0.61%, Germany's DAX increased by 0.37%, whereas France's CAC 40 saw a slight decline of 0.19%. Switzerland's SMI strengthened by 0.83%.
In other European markets, Belgium, Denmark, Finland, Ireland, Portugal, Russia, and Spain saw gains, while indices in Greece, Iceland, Norway, Poland, Sweden, and Turkey experienced losses. Austria and the Netherlands closed unchanged.
In the UK market, GSK surged by 7.61% after the company reported strong performance for 2024 and raised its long-term sales outlook. Fresnillo ended the day with an approximate 6% gain. Marks & Spencer, Endeavour Mining, Tesco, Land Securities, Schroders, Sainsbury's, LondonMetric Property, BT Group, Beazley, M&G, Taylor Wimpey, British Land Company, British American Tobacco, and Phoenix Group Holdings recorded gains ranging from 2% to 2.7%. On the other hand, shares in Diageo, DCC, and Croda International fell between 3.2% and 4%. Spirax Group, Prudential, Halma, Diploma, Ashtead Group, and Pershing Square Holdings also saw declines of 1.2% to 2.2%.
Germany's market observed Vonovia climbing nearly 3.5%, Infineon gaining about 2.8%, and Siemens Energy ascending by 2.6%. Zalando increased by 2%, while SAP and Siemens Healthineers finished the session with rises of approximately 1.4% and 1%, respectively. Conversely, Symrise, Continental, Daimler Truck Holding, Sartorius, Mercedes-Benz, Volkswagen, BMW, and Porsche recorded losses ranging from 1.4% to 2.7%.
In France, Publicis Groupe went up more than 2%, while Unibail-Rodamco advanced by roughly 1.3% and TotalEnergies rose by 1.7%, as the company maintained its dividend and pace of share buybacks despite a drop in fourth-quarter earnings. Dassault Systemes, ArcelorMittal, Essilor, Sanofi, Saint-Gobain, and Capgemini showed moderate gains, with Credit Agricole rising post-announcing better-than-expected earnings due to higher revenue in the last quarter of 2024. However, Pernod Ricard decreased nearly 4%, with Renault, STMicroelectronics, Schneider Electric, L'Oreal, BNP Paribas, Vivendi, Michelin, Veolia, Kering, and LVMH witnessing declines between 1.3% and 2.4%.
On the economic data front, the HCOB Eurozone Composite PMI increased to 50.2 in January 2025, from 49.6 the previous month, aligning with preliminary data and surpassing expectations of 49.7. The services sector PMI recorded 51.3 for January, a slight decrease from 51.6 in December 2024, while the manufacturing sector PMI improved to 46.6 from 45.1 in December.
In Germany, the HCOB Composite PMI was revised upwards to 50.5 in January 2025 from an initial estimate of 50.1 and 48.0 in December, marking its first expansion in seven months. The services sector expanded, with a PMI reading of 52.5, while the manufacturing sector contracted at a slower rate, with a PMI of 45.0.
In contrast, the HCOB France Composite PMI for January 2025 was adjusted downwards to 47.6 from the flash estimate of 48.3, slightly higher than December's 47.5, marking the fifth consecutive monthly contraction in output. Both the manufacturing and services sectors contributed to the decline in economic activity for January, though the manufacturing sector contracted at a more moderate rate. The manufacturing PMI achieved a score of 45, an improvement from December's 41.9, while the services PMI dropped to 48.2 from 49.3 in December.
French industrial production decreased by 0.4% month-on-month in December 2024, following a downwardly revised 0.1% increase in November, driven by a 0.7% contraction in manufacturing output.
In the UK, the S&P Global Composite PMI rose to 50.6 in January 2025 from 50.4 the previous month, recovering from a 14-month low. The services sector PMI reading registered at 50.8 for January, down from 51.1 the month before, while the manufacturing PMI improved to 48.3 from 47.0.
