European equity markets opened Thursday under pressure, with major indices slightly lower as investors paused to digest a barrage of earnings reports and renewed economic concerns. By 07:05 GMT, Germany’s DAX slipped 0.3%, France’s CAC 40 was down 0.5%, and the UK’s FTSE 100 hovered flat.
The retreat follows Wednesday’s gains driven by hopes for easing U.S.-China trade tensions. However, those hopes are proving fragile. President Trump’s tariff threats have raised fears of a global slowdown, and Deutsche Bank analysts say the market remains unconvinced about the path forward.
“Markets are not fully pricing in a recession,” the bank noted, citing the modest scale of equity pullbacks and credit spread widening. The note warned of “significant downside risks” should macroeconomic conditions deteriorate and tariffs materialize after the current 90-day extension.
German Ifo and PMI Signal Slowdown
Economic data also fueled investor caution. The German Ifo Business Climate Index, a leading indicator for Europe’s largest economy, is forecast to decline for April, adding to concerns about stagnation.
Meanwhile, the eurozone’s composite Purchasing Managers’ Index (PMI) fell to 50.1 in April, down from 50.9 in March, according to S&P Global. A reading barely above 50 indicates minimal growth, and highlights that business confidence is weakening in the face of geopolitical uncertainty.
Key indicators weighing on sentiment:
- Eurozone PMI at 50.1, lowest in three months
- German Ifo index expected to decline
- U.S. tariffs continue to cloud the European outlook
Corporate Earnings Drive Stock Movements
With over a dozen major companies reporting, earnings dominated headlines. Results were mixed, reflecting both strong sector resilience and vulnerability to global pressures.
- STMicroelectronics sees Q1 as the year’s low, forecasts improved Q2 earnings
- Unilever beats Q1 sales estimates, maintains 2025 forecast
- Renault posts 0.6% revenue rise amid strong new model sales
- BNP Paribas meets expectations, stays firm on guidance
- Nestlé reports stronger organic growth, warns on indirect U.S. tariff effects
- Roche beats with 7% sales growth, led by oncology and eye care drugs
- Nokia misses profit expectations, citing tariff-driven disruptions
Despite corporate resilience in some sectors, caution dominates investor sentiment. The broader economic backdrop and trade concerns continue to weigh heavily on equities.
Final Note:
While oil prices steadied slightly on Thursday—Brent up 0.8% to $62.75, WTI up 0.7% to $66.58—ongoing OPEC+ supply discussions and elevated U.S. inventories continue to influence global markets. The outlook for European equities remains tied to geopolitical clarity and sustained corporate strength.
