European Stocks Close On Upbeat Note

(RTTNews) - European markets closed on a buoyant note on Wednesday amid optimism about some relaxation in tariffs on Canada and Mexico, and on news that Germany will relax rules to increase spending on defense and infrastructure.

German parties, hoping to form a coalition, agreed to create a 500 billion euro infrastructure fund and overhaul borrowing rules in a tectonic spending shift to revamp the military and revive growth in Europe's largest economy.

Germany's chancellor-in-waiting, Friedrich Merz, announced yesterday that the nation's main centrist parties had agreed to establish the infrastructure fund to invest in transportation, energy grids, and housing. Merz also stated that Germany would amend its constitution to exempt defense and security spending from fiscal limits.

Comments from U.S. Commerce Secretary Howard Lutnick that President Donald Trump will "probably" announce a deal to reduce tariffs on Canada and Mexico also contribute to the positive sentiment in the market.

The pan European Stoxx 600 climbed 1.64%. The U.K.'s FTSE 100 closed higher by 0.82%, while Germany's DAX and France's CAC 40 closed stronger by 3.63% and 2.35%, respectively. Switzerland's SMI ended 0.82% up.

Among other markets in Europe, Austria, Denmark, Greece, Iceland, Ireland, Poland, Spain, Sweden and Turkiye ended sharply higher.

Belgium, Finland, Norway, Portugal and Russia also posted strong gains, while Netherlands closed weak.

In the UK market, Antofagasta, Fresnillo, Melrose Industries, Convatec Group, EasyJet and Mondi gained 5 to 6.5%.

Anglo American Plc, Prudential, Schrodders, Weir Group, IMI, Barclays Group, Endeavour Mining, BAE Systems, Games Workshop Group, Ashtead Group, Diageo, Scottish Mortgage, Glencore and IAG climbed 2.5 to 4.7%.

Severn Trent closed down 4.5%. National Grid, Haleon, United Utilities, Pearson, Compass Group, Land Securities, Intertek Group, Tesco, British American Tobacco, RightMove, BT Group, Segro and Relx closed lower by 2 to 4%.

In the German market, shares of multinational building materials company HeidelbergCement soared 17.5%. Deutsche Bank rallied 12%, Commerzbank zoomed 11% and BASF climbed 10.6%.

Siemens, Siemens Energy, Continental, Daimler Truck Holding, Brenntag and Rheinmetall gained 6.5 to 9%.

Infineon, Deutsche Post, Zalando and BMW gained 4.5 to 5.5%. Bayer climbed 4.5%. The pharmaceutical and life sciences major, reported Wednesday a loss in its fourth quarter, compared to prior year's profit, amid slightly lower sales. Looking ahead, for fiscal 2025, Bayer projects core earnings per share and adjusted EBITDA to decline, and sales roughly at prior-year level..

Vonovia closed down 7.6%. Deutsche Telekom, Symrise and E.ON lost 2 to 3.1%.

In the French market, ArcelorMittal climbed nearly 11% after the European Union announced an action plan to boost Europe's steel sector and protect it from potential U.S. tariffs.

Saint Gobain rallied 8.7% and Thales gained about 7.3%. Teleperformance, STMicroElectronics, Capgemini, Vinci, Societe Generale and Legrand climbed 5 to 6%.

Stellantis, BNP Paribas, Bouygues, Schneider Electric, Edenred, Credit Agricole, Veolia, Renault, Eurofins Scientific, Michelin, Airbus Group, Sarfan, Dassault Systemes, Accor and L'Oreal also closed sharply higher.

Dassault Aviation SA shares gained 4.3%. The maker of military aircraft and business jets posted net income of 923.82 million euros or 11.78 euros per share in full-year 2024, up from 693.40 million euros or 8.57 euros per share last year.

Unibail Rodamco ended more than 3% down. Danone, Essilor, Engie, Vivendi and TotalEnergies lost 1 to 2.2%.

MTU Aero Engines, Puma, Sartorius, Mercedes-Benz, Volkswagen, Fresenius, Allianz, SAP, Hannover Rueck, Merck, Fresenius Medical Care, Munich RE and Siemens Healthineers climbed 1 to 4%.

On the economic front, euro area private sector grew modestly in February as Germany, Spain and Italy expanded, but French activity hit the lowest in more than a year, final results of the purchasing managers' survey by S&P Global showed.

The HCOB final composite output index remained unchanged at 50.2 in February. The score also matched the flash estimate of 50.2. The services Purchasing Managers Index decreased to a three-month low of 50.6 from 51.3 in January, indicating a loss of growth momentum.

Eurozone producer price inflation accelerated to 1.8% in January from 0.1% in December, data from Eurostat showed. The rate was seen at 1.4%. The producer price index climbed 0.8% month-on-month, which was faster than the 0.5% increase in December and also bigger than economists' forecast of 0.3%.

The HCOB Germany Composite PMI was revised lower to 50.4 in February 2025 from a preliminary of 51, compared to 50.5 in January. Service sector business activity growth moderated to 51.1 from 52.5 a month earlier. Manufacturing activity score came in at 46.5, up from 45.0 a month earlier.

France's industrial production decreased 0.6% on a monthly basis in January, confounding expectations for an increase of 0.6%, data from INSEE showed. This followed a 0.5% fall in December. Manufacturing output was down 0.7% month-on-month but this was slower than the 1% decline in December.

The HCOB France Composite PMI for February 2025 was revised up to 45.1, from the flash estimate of 44.5, but below January's 47.6. The latest reading indicated the sixth straight month of contraction in the country's private sector and at a solid pace.

The HCOB France Services PMI fell to 45.3 in February 2025 from 48.2 in the previous month.

On the economic front, the S&P Global UK Composite PMI dipped slightly to 50.5 in February 2025, down from 50.6 in the previous month, signaling marginal economic growth. Expansion in the services sector continued to offset a sharp decline in manufacturing output.

The S&P Global UK Services PMI rose to 51 in February 2025 from 50.8 in the previous month, revised higher from the flash estimate of 51.1.

A report from the Society of Motor Manufacturers and Traders Limited (SMMT) said new passenger car registrations in the UK declined by 1% year-on-year to 84,054 units in January 2025, marking the fifth consecutive month of falling sales.