European Stocks Close Mostly Higher On Fed Rate Cut Hopes

(RTTNews) - European stocks closed higher on Monday, thanks to encouraging German economic data, and optimism about an interest rate cut by the Federal Reserve next week. Concerns about political uncertainty in France weighed and limited markets' upside.

Investors' focus was on the confidence vote in France this afternoon. Expectations of a rate cut by the Federal Reserve next week appear to be aiding sentiment to some extent.

According to latest news, French Prime Minister Francois Bayrou has lost the confidence vote. Following this President Emmanuel Macron is now set to begin the search for his fifth prime minister in less than two years.

The pan European Stoxx 600 climbed 0.33%. The U.K.'s FTSE 100 edged up 0.07%, Germany's DAX and France's CAC 40 gained 0.54% and 0.49%, respectively. Switzerland's SMI lost 0.47%.

Among other markets in Europe, Austria, Belgium, Finland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden ended higher.

Denmark, Greece, Iceland and Turkiye closed weak, while Czech Republic ended flat.

In the UK market, Marks & Spencer climbed nearly 3% thanks to a rating upgrade by Citigroup. Fresnillo ended 2.85% up. Croda International, Howden Joinery, ICG, Standard Chartered, Polar Capital Technology, Weir Group, Reckitt Benckiser, Diploma and Rolls-Royce Holdings gained 1.5 to 2.4%.

Homebuilder Vistry moved up sharply after it entered into a partnership with Homes England, a housing and regeneration agency, to accelerate development of large-scale sites across England.

Phoenix Group Holdings tanked 7.6% after the insurer announced interim results for the first half of 2025. The company eported a loss before tax of 209 million pounds for the first half. However, the loss was lower than 862 million pounds for the corresponding period last year.

The company posted adjusted operating profit of 451 million pounds, higher than 360 million pounds a year ago. Net loss was 156 million pounds, down from 646 million pounds last year.

Diageo closed down by 3.65%. Airtel Africa, Haleon, Unilever, Games Workshop, Imperial Brands, M&G, Hikma Pharmaceuticals and Coca-Cola HBC lost 1.2 to 2.5%.

In the German market, Zalando surged about 5%. Adidas, Commerzbank, Volkswagen, Rheinmetall, Heidelberg Materials, RWE, Siemens Energy and Siemens gained 2 to 3.6%.

Deutsche Telekom closed down 3.7%, while Porsche, Daimler Truck Holding, Mercedes-Benz and BMW lost 0.6 to 1%.

In the French market, Schneider Electric rallied 3.6%. Legrand, Airbus, Dassault Systemes, Capgemini, Saint-Gobain, Credit Agricole, Vinci and Vivendi gained 1.5% to 2.4%.

Societe Generale, Michelin, Bouygues, Thales, Accor and Essilor Luxottica also closed notably higher.

Edenred tumbled by about 3.7% amid prospects of a dselay in the adoption of the meal voucher reform. The project has already been postponed several times due to changing political conditions in the country.

Stellantis, STMicroElctronics and Pernod Ricard closed lower by 1 to 1.6%.

Data from Destatis showed Germany's industrial production rose 1.3% month-on-month in July, following a 0.1% drop in June. A 9.5% growth in the manufacture of machinery and equipment contributed to the increase in industrial production in July.

A separate data showed Germany's foreign trade surplus decreased in July as exports fell faster than imports. Exports posted a monthly decrease of 0.6% in July, reversing a 1.1% recovery in June. Imports dropped slightly by 0.1% after rising 4.1% in a month ago.

Results of a survey showed investor morale in the euro zone plunged in September to its lowest level since April. The Sentix index for the region unexpectedly fell to -9.2 in September from -3.7 in August. The investor sentiment index was seen rising to -2.2 in September.