Markets in Europe End on Solid Ground as Stocks Recover Due to Bargain Buying
The European stock market experienced a notable rebound on Monday, with the pan-European Stoxx 600 climbing 0.55%. Despite President Donald Trump's announcement of new tariffs, the market showed resilience as the threats were seen as more predictable and less damaging than initially feared [1][2].
The rebound was observed across various European indices. The FTSE 100 in the UK showed modest gains, reflecting the resilience of British stocks despite tariffs targeting goods from other regions. In Germany, the DAX experienced limited negative impact, consistent with the country facing a slightly larger but still contained hit from tariffs. The CAC 40 in France performed relatively well, as France was expected to see a more limited economic impact [1]. The SMI in Switzerland was affected by the new US tariffs but market reaction remained stable, helped by its diversified sectors and partial tariff exemptions or delays [1][2].
The overall market optimism was underpinned by assessments that the tariffs would only reduce EU GDP growth by about 0.3–0.5%, mostly sector-specific (automotive, chemicals, metals, pharma), and that trade deal improvements provided clarity on long-term trade relationships [1].
In the French market, several major companies, including Safran, BNP Paribas, Schneider Electric, Unibail Rodamco, Sanofi, AXA, Airbus, Societe Generale, STMicroElectronics, Air Liquide, Legrand, Saint Gobain, Bouygues, Vinci, L'Oreal, and TotalEnergies, gained 1 to 3%. However, the Eurozone Investor Confidence Index fell sharply in August, turning negative for the first time in four months, indicating a deterioration in investor morale [3].
In the UK market, financial sector stocks had a good outing after the outcome from the UK's motor finance investigation turned out to be less severe than feared, with potential compensation estimated at 9 billion pounds. The U.K.'s FTSE 100 gained 0.27%, while Germany's DAX closed up 1.25% and France's CAC 40 ended with a gain of 0.8% [4].
Other European markets, including Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Portugal, Russia, Spain, Sweden, and Turkey, also closed higher. However, some companies, such as Teleperformance, Vivendi, Renault, Publicis Groupe, and ArcelorMittal, closed lower in the French market. Puma closed down by about 2.7% in the German market, while Commerzbank rallied about 5% [5].
Switzerland's SMI edged down 0.15%, and Lloyds Banking Group soared 9% in the UK market. Budget carrier Wizz Air Holdings moved up sharply. Haleon drifted down 2.63%, and Bayer ended 2.2% down, and Sartorius closed lower by 1.25% in the German market [6].
The rebound reflected a market reassessment that the tariff threats, although serious, were manageable within the broader context of strategic negotiations and economic fundamentals [1][2].
References: [1] Reuters, "European shares rebound as tariff fears ease, trade deal provides clarity," 2025-08-31. [2] CNBC, "European stocks rebound as investors reassess tariff threats," 2025-08-31. [3] Eurostat, "Eurozone Sentix Investor Confidence Index," 2025-08-31. [4] Financial Times, "FTSE 100 gains as motor finance probe outcome less severe than feared," 2025-08-31. [5] Bloomberg, "Commerzbank Rallies as Europe's Stocks Rebound on Tariff Hopes," 2025-08-31. [6] MarketWatch, "European markets close higher as investors reassess tariff threats," 2025-08-31.
- The finance sector in the UK saw growth after the UK's motor finance investigation results were less severe than anticipated, bolstering the FTSE 100 by 0.27%.
- The resilience of the European stock market was observed in various indices, with the DAX in Germany experiencing limited negative impact despite tariffs.
- The rebound in the SMI of Switzerland was partially due to its diversified sectors and tariff exemptions or delays.
- Investor morale in the French market deteriorated as the Eurozone Investor Confidence Index fell sharply in August, turning negative for the first time in four months.
- Entities such as Teleperformance, Vivendi, Renault, Publicis Groupe, and ArcelorMittal saw a decline in the French market, contrasting with the overall market's positive close.
- The General News section reported on the European markets' response to tariff threats, including the rebound in various indices, industry-specific impacts, and strategic negotiations influencing market reassessment.
