Major European stock markets closed little changed on Friday following a subdued session, with investors unwilling to make bold moves amid a cautious backdrop.
Concerns over Middle East tensions and the prospect of further interest rate hikes from both the Federal Reserve and the European Central Bank kept trading restrained throughout the day.
Stronger than expected U.S. nonfarm payroll employment data has raised the likelihood of a Fed rate hike at its upcoming policy meeting, adding to market uncertainty.
The European Central Bank is also widely expected to tighten its monetary policy further, leaving investors in a holding pattern as they await clearer guidance from policymakers.
The UK’s FTSE 100 settled close to its previous finishing mark, while Germany’s DAX edged up 0.17% and Switzerland’s SMI finished 0.01% higher on the day.
The pan-European Stoxx 600 ended with a modest gain of 0.12%, though the DAX and CAC 40 shed roughly 2% and 1.3% respectively across the week, with the FTSE 100 also edging marginally lower.
In the UK market, Computacenter surged more than 4%, while Kingfisher climbed 3.3% and Vodafone Group gained 2.7% on the session.
On the downside, Experian shed about 4.4%, with Coca-Cola Europacific Partners, Relx, AstraZeneca, BAE Systems, and GSK all closing lower by between 1% and 2.3%.
The biggest story in European markets came from Germany, where Volkswagen (VWAGY) rallied 6.5% after announcing plans to cut another 50,000 jobs as part of its transformation program “Future Plan 2030,” which includes 12 initiatives targeting significant cost savings and sustainable improvements in profitability.
Volkswagen also said it would halve its model portfolio by 2035, aiming for more resilient and competitive operations under demanding market conditions, and added it will invest a three-figure billion sum over the coming years.
Porsche Automobil Holding jumped 3.6% and Zalando moved up 3%, while Rheinmetall shed more than 3% and Bayer closed lower by between 1% and 1.5%.
In the French market, Legrand climbed 3.3% and STMicroelectronics, Accor, and ArcelorMittal each gained between 2.4% and 2.7% on the day.
Dassault Systemes ended more than 6% down, while Capgemini shed more than 3%, and TotalEnergies and EssilorLuxottica also declined sharply.
On the economic data front, figures from Destatis showed Germany’s factory orders grew more than expected in July, rising 2.5% on a monthly basis compared to forecasts of just 0.3% growth.
Germany’s construction sector downturn also moderated notably in August, with the construction purchasing managers’ index climbing to 48.7 from 42.1 in July, signalling improving conditions in commercial activity.
Data from S&P Global showed France’s Construction PMI slipped sharply to 37.3 in August from 41.5 in July, marking the steepest drop since May 2020, with declines recorded across all three construction categories.
The UK Construction PMI eased to 44.3 in August from 44.7 the prior month, missing expectations of 45.5, with the residential work index slumping to 37.6 and civil engineering activity dropping to 40.5.
Across broader European markets, Austria, Finland, Greece, Ireland, Netherlands, Poland, Russia, Spain, Sweden, and Turkiye all closed higher, while Belgium, Czech Republic, Denmark, Norway, and Portugal ended in the red.
