European Stocks Edge Higher Amid Mixed Sentiment on German Data and Corporate Moves

European stock markets started the week mostly in positive territory on Monday, buoyed by optimism around U.S. Treasury Secretary nominee Scott Bessent and major corporate news, but tempered by weaker-than-expected German business confidence data.

Market Performance

By 06:40 ET (11:40 GMT):

• Germany’s DAX rose 0.4%.
• France’s CAC 40 was largely flat.
• UK’s FTSE 100 edged up by 0.2%.

Factors Driving Sentiment

1. Trump’s Treasury Nomination Bolsters Optimism
   President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary has sparked market optimism. Bessent has emphasized prioritizing tax cuts while advocating a gradual implementation of tariffs. This approach has reassured investors of a balanced economic strategy, boosting global sentiment.
2. Weak German Business Confidence
   Sentiment was tempered by disappointing German economic data.
   • Ifo Business Climate Index: The index fell to 85.7 in November, down from 86.5 in October, reflecting persistent concerns about Europe’s largest economy amid weak manufacturing and export activity.
3. Major Corporate Developments
   • UniCredit’s Bold Move: Italian banking giant UniCredit surprised markets with a €10 billion ($11 billion) all-share bid for Banco BPM. The acquisition would create a stronger pan-European banking presence.
   • ITV Gains: ITV shares surged 8% amid speculation of takeover interest from prominent investors, signaling renewed focus on the UK’s media sector.
   • Kingfisher Slumps: The DIY retailer’s stock dropped 13% after posting disappointing third-quarter results, underscoring challenges in the European retail sector.
4. Central Bank Insights Awaited
   Investors are looking ahead to key speeches from:
   • ECB Chief Economist Philip Lane and Governing Council member Gabriel Makhlouf, who are expected to address eurozone growth concerns.
   • BoE Officials Clare Lombardelli and Swati Dhingra, who will discuss inflation risks and the monetary policy trajectory for the UK.

Outlook

While U.S. fiscal policy developments offer a positive backdrop, persistent eurozone economic weaknesses, combined with corporate earnings pressures, highlight a cautious path ahead for European markets. Investors will closely monitor central bank comments for cues on monetary easing and inflation strategies.