European markets close flat

Frankfurt — Major European markets closed broadly flat on Tuesday as investors stayed cautious amid ongoing political tensions in France and a lack of fresh market catalysts.

Sentiment remained subdued as investors tracked developments in Paris, where Prime Minister Sébastien Lecornu, who tendered his resignation on Monday, was asked to continue negotiations with other parties to help resolve the country’s political crisis.

Adding to the cautious mood, higher bond yields and weak data showing another decline in German factory orders weighed on risk appetite.

The pan-European Stoxx 600 slipped 0.17%. The UK’s FTSE 100 and Germany’s DAX edged up 0.05% and 0.03%, respectively, while France’s CAC 40 managed a 0.04% gain after recovering from early losses. Switzerland’s SMI fell 0.24%.

Elsewhere in Europe, markets in the Czech Republic, Denmark, the Netherlands, Norway, Portugal, Spain and Sweden finished lower, while Finland, Greece, Iceland, Ireland, Poland, Russia and Turkey ended higher. Belgium closed flat.

In London, Imperial Brands rose nearly 3.5% after announcing an additional £1.45 billion ($1.95 billion) share buyback programme. Rentokil Initial and Burberry Group advanced 3.9% and 3%, respectively, while Beazley added 2.78%.

Other notable gainers included British American Tobacco, Metlen Energy & Metals, Shell, Associated British Foods, Croda International, Diageo and Haleon, which rose between 1% and 2%.

On the downside, Entain tumbled more than 6.5%, and Mondi slipped nearly 5% despite some early-session support. JD Sports Fashion, Spirax Group, Babcock International, Weir Group, Relx, Fresnillo, NatWest Group and Lloyds Banking Group also finished sharply lower.

In Frankfurt, Symrise climbed nearly 2.5%, while SAP and Fresenius Medical Care gained 1.7% and 1.3%, respectively. Siemens Energy, BMW, Bayer, Infineon, Continental, Commerzbank and Deutsche Post were among the notable decliners.

Official data from Destatis showed German factory orders fell 0.8% month-on-month in August, following a 2.7% drop in July and missing forecasts for a 1.2% increase. Excluding large orders, new orders were down 3.3% on the month.

In Paris, Kering rallied more than 6% and LVMH surged nearly 3.5% after Morgan Stanley upgraded both stocks to overweight. Renault climbed 2.7%, while L’Oréal, Stellantis and Teleperformance also posted solid gains.

Meanwhile, Société Générale, STMicroelectronics, Schneider Electric, Unibail-Rodamco, Sanofi, BNP Paribas, Legrand, TotalEnergies and Michelin declined between 1% and 2%.

On the macro front, data from the Customs Office showed France’s trade deficit narrowed to €5.5 billion ($6.4 billion) in August, the smallest since December 2024, from a revised €5.7 billion in July. Exports held steady at €51.8 billion, while imports slipped 0.4% to €57.3 billion.

Separately, the Halifax report showed UK house prices fell 0.3% month-on-month in September, the first decline in four months, as concerns over potential tax increases dampened market activity.

The average property price stood at £298,184, while annual price growth slowed to 1.3% from 2% in August — the weakest pace since April 2024.