European Markets Attempt to Rebound, UK Retail Sales Growth Slowed In February

Bridgette Randall
11 Mar, 2025
London

European markets attempted to rebound after Monday's sell-off as investors recalibrated geopolitical headwinds and new commitments to increase government spending. 

Benchmark indexes in Frankfurt, Paris, Milan, and London traded in a tight range as investors returned to add positions in infrastructure and defense-related stocks. 

On Monday, investors sold stocks amid worries that the Trump administration's reliance on tariffs and government layoffs is pushing the U.S. economy into a recession and shrinking global goods trade. 

However, European leaders pledged to commit as much as €800 billion to ramp up arms production after the U.S. announced its withdrawal of support for Ukraine and pushed for peace with Russia. 

In addition, Germany's CDU party leader Friedrich Merz announced a plan to set up a €500 billion fund to finance infrastructure development in the coming years. 

The two announcements of ramped-up spending supported market enthusiasm last week, despite a weak macroeconomic outlook in the region and deteriorating trade relations with the U.S. 

On the economic front, the UK's retail sales advanced at an annual pace of 0.9% in February, sharply lower than the 2.5% pace in the previous month, according to data released by the British Retail Consortium. 

Consumers have avoided large-ticket items amid the high cost of living, and nonfood store sales were unchanged.

 

Europe Indexes and Yields

The DAX index increased by 0.6% to 22,765.80, the CAC-40 index edged higher 0.5% to 8,084.57, and the FTSE 100 index declined by 0.1% to 8,593.28. 

The yield on 10-year German bonds inched higher to 2.86%, French bonds increased to 3.58%, the UK gilts moved up to 4.61%, and Italian bonds edged higher to 3.93%.

The euro increased to $1.09; the British pound was higher at $1.29; and the U.S. dollar was higher and traded at 88.12 Swiss cents.

Brent crude increased $0.49 to $69.77 a barrel, and the Dutch TTF natural gas was higher by €0.46 to €41.47 per MWh.

 

Europe Stock Movers

Volkswagen AG edged up 1.2% to €111.60 after the German vehicle maker reported a sharp decline in earnings in 2024, but the automaker held out for operating margin improvement in the current year. 

Henkel AG dropped 9.3% to €78.70 after the German consumer goods company's organic sales outlook in 2025 fell short of market expectations. 

Costain Group PLC soared 8.2% to 112.50 pence after the UK-based construction company reported strong results in 2024 and guided a positive order flow outlook in the current year. 

HelloFresh SE plunged 13.5% to €8.71 after the meal kit services provider offered a softer organic growth outlook in 2025.