by Diana Mandia
(Reuters) – European stock markets ended slightly higher on Friday, helped by signs of commercial calm and hopes of monetary easing in the United States, while remaining cautious about the political situation in France.
In Paris, the CAC 40 finished unchanged at 8,225.63 points, after moving in the red for a large part of the session. In Frankfurt, the Dax gained 0.15% and in London, the FTSE 100 increased by 0.70%.
The EuroStoxx 50 index ended up 0.08%, the FTSEurofirst 300 gained 0.19% and the Stoxx 600 gained 0.17%.
Over the week the Stoxx 600 gained 1.62% and the CAC 40 0.63%
European stock markets struggled to find direction on Friday, alternating gains and losses throughout the session, depending on the publication of company results and macroeconomic data, in a context of hopes of commercial appeasement between the United States and China.
US consumer prices rose slightly less than expected in September, data showed on Friday, helping the Stoxx 600 return to positive territory in the afternoon as investors were reassured that the Federal Reserve (Fed) is moving towards further interest rate cuts.
“The September CPI report confirms that the increases in customs duties will have had only a limited effect on inflation in 2025 and in any case very much lower than what had been anticipated,” underlines Bastien Drut, head of strategy and economic studies at CPRAM, adding that the October and December rate cuts seem certain.
The publication of this data, although delayed by the continuing paralysis of the American government, comes a few days before the Fed’s monetary policy decision next Wednesday, in a week which will also be marked by decisions by the central banks of the euro zone, Canada and Japan.
Markets also regained some calm after the White House confirmed on Wednesday that US President Donald Trump would meet his Chinese counterpart Xi Jinping next week during his tour of Asia. The Republican, however, toughened his tone with his Canadian neighbor, even announcing that he had abandoned the current trade negotiations with Ottawa.
In France, the political situation remains at the center of attention, while deputies began examining the revenue part of the 2026 budget on Friday in the hemicycle of the National Assembly where the debates promise to be heated while the Socialist Party (PS) once again brandishes the threat of censorship of Sébastien Lecornu’s government.
It is in this context of high uncertainty over public finances that the Moody’s agency must decide this evening on the sovereign rating of the second economy in the euro zone, a week after S&P Global Ratings lowered its credit rating and a month after a similar measure by Fitch.
VALUES
The quarterly results published in recent hours also kept investors busy on Friday.
Accor climbed to the top of the CAC 40 (+7.04%) after reporting “reassuring” third-quarter results on Thursday evening, with analysts also highlighting the increase in the annual operating profit target.
Mersen, which lowered its outlook for 2025 on Thursday, citing in particular the low level of sales expected for the solar market, plunged 18.26%, the bottom of the SBF 120 index.
Valeo, for its part, gained 10.81% after the publication of its quarterly turnover and the confirmation of its annual objectives.
Kering, which had gained more than 8.71% the day before after the publication of its results, closed Friday down 3.86%, at the lowest of the CAC 40, the broker HSBC having lowered its recommendation on the stock from “buy” to “hold”, citing the absence of positive catalysts in the short term.
Elsewhere in Europe, Signify fell 9.44% after the Dutch lighting specialist posted a bigger-than-expected fall in third-quarter sales and lowered its full-year forecast, citing falling demand from commercial and public sector customers in the United States.
Saab climbed 6% after reporting a 16% rise in quarterly operating profit.
A WALL STREET
Data indicating a slowdown in inflation in September reassures investors about the evolution of interest rates in the United States and supports the New York Stock Exchange, which reached records on Friday.
At closing time in Europe, the Dow Jones advanced by 1.24%, the Standard & Poor’s 500 by 0.96% and the Nasdaq Composite by 1.21%.
TODAY’S INDICATORS
In addition to American inflation, investors took note of PMI data on Friday concerning the private sector in the euro zone.
The bloc’s economic activity grew faster than expected in October, as companies received new orders at the strongest pace in two and a half years.
In France, however, private sector activity fell more quickly than expected this month, as demand for goods and services in the euro zone’s second-largest economy further weakened in a context of political crisis.
In the United Kingdom, the manufacturing sector is showing signs of recovery and inflationary pressures are easing, but caution still prevails ahead of the government’s presentation of the budget next month.
CHANGES
The dollar gained 0.04% against a basket of reference currencies. The euro for its part gained 0.05% to 1.1623 dollars.
RATE
Euro zone government bond yields ended higher on Friday as better-than-expected preliminary PMIs prompted investors to slightly reduce their bets on a European Central Bank (ECB) rate cut next year, while the political situation in France remains uncertain.
The ten-year German Bund yield rose 4.6 basis points to 2.6246%. The two-year bond increased by 4.5 basis points to 1.9786%.
In France, the yield on the ten-year OAT rose by 5.6 basis points to 3.4335%.
In the United States, US Treasury yields are struggling to find direction. That of the two-year bond, more sensitive to rate expectations, fell by 1.3 basis points to 3.4694% after the publication of data on American inflation, while the 10-year rate was stable at 3.9911%.
OIL
Oil prices edged higher, extending the previous day’s gains and heading for a weekly gain of around 7% as U.S. sanctions against Russia’s two largest oil companies sparked supply concerns.
Brent rose 0.91% to $66.59 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.81% to $62.29.
TO BE CONTINUED ON OCTOBER 27:
(Some data may have a slight lag)
(Writing by Diana Mandiá, editing by Kate Entringer)
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