Europe close: Stocks rise for third day as bond yields, oil prices fall
European stock markets advanced for the third straight session on Tuesday on the back of falling oil prices and bond yields, with sentiment supported by record highs on Wall Street.
The Stoxx Europe 600 finished 0.5% higher at 636.63, continuing to rally after hitting its lowest since mid-June last Thursday.
Markets were given an extra boost in afternoon trade by a solid start to the trading session in New York, with both the S&P 500 and Nasdaq at all-time highs.
Stocks in Paris in particular were bouncing back as yield spreads between French and safer German bonds tightened to around 130 basis points after hitting a multi-year high of 156bp on Monday on rising fiscal concerns over the country’s swelling deficit. The 10-year OAT yield was down 11.2bp at 4.755%, while the 10-year Bund yield was 1.1bp lower at 3.496%.
The French government has proposed a massive package of tax rises and spending cuts which is expected to face widespread public protest.
France's central bank governor Emmanuel Moulin warned the country risked being "gradually strangled by rising interest rates" unless the government passes its budget proposals to cut spending and narrow the deficit.
Meanwhile, Spanish stocks were also higher after socialist Prime Minister Pedro Sanchez called a snap poll for November 29 in response to right-wing parties blocking legislation to deal with a spike in housing costs.
The euro, which slipped to a 16-month low of $1.1160 against the dollar on Monday, was up 0.36% to $1.1263. Oil prices, meanwhile, dipped below the $100 mark with front-month Brent crude futures down 0.7% at $99.65 a barrel.
In equity news, shares in Danish biotech group Genmab jumped 4% to a three-year high after a late-stage trial of its lymphoma treatment developed with AbbVie delivered better outcomes than the current standard therapy.
Informa surged in London after agreeing to buy event and exhibition organiser Clarion for £2.24bn, and announcing plans to separate its academic business, Taylor & Francis, to focus on the core B2B business.
On the economics front, construction activity across the eurozone remained firmly in contraction territory in September, with housebuilding suffering its steepest decline in more than a year and a half. The S&P Global eurozone construction PMI total activity Index edged up to 43.4 from 43.0 in August, but remained well below the 50.0 mark separating growth from contraction and below its long-run average of 47.1.
Eurozone retail sales edged higher in August, partly reversing the previous month's decline. Seasonally adjusted retail trade volumes rose 0.1% month on month across the eurozone, following a 0.6% fall in July, which was the steepest decline since May 2025.
Meanwhile in Germany, manufacturing orders slumped in August, falling more than expected. Factory orders were down 10.6% month on month, according to the federal statistics office, but were up 2.7% compared with August last year.