This morning, European markets opened with strong momentum. The STOXX Europe 600 rose 0.66% to 573 points, while Germany’s DAX gained 0.69%, France’s CAC 40 advanced 0.81%, and the UK’s FTSE 100 climbed 0.8%.A positive start  yet investors remain cautious amid ongoing economic and political uncertainties.

In France, political instability continues to weigh on market sentiment. The resignation of Prime Minister Sébastien Lecornu has fueled concerns over government stability, though hopes remain that upcoming political negotiations could bring some relief.Meanwhile, Germany delivered another worrying signal, with industrial production plunging 4.3% in August  the steepest monthly decline since 2022 raising doubts about the strength of Europe’s economic recovery.

At the sector level, heavy industry and steel stocks led the gains, with ArcelorMittal, Aperam, and Voestalpine all moving higher on optimism that the European Union will strengthen measures to protect steel imports.Conversely, automakers were under pressure: BMW (-8.6%), Mercedes (-3.4%), and Volkswagen (-1.9%) all slipped amid concerns over profit margins and demand. The semiconductor sector also struggled, with Infineon (-1.4%) and ASML briefly declining after a U.S. Congressional warning about export risks to China.

On the commodities front, gold remains a safe haven, holding firm amid global uncertainty, while oil continues to climb, supported by steady demand and ongoing geopolitical tensions.

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