Europe close: LVMH, luxury plays underpin French rally
By Josh White
Date: Wednesday 15 Oct 2025
(Sharecast News) - European stocks advanced on Wednesday, lifted by strong corporate results and a relief rally in France after signs of easing political tensions, though markets in London and Frankfurt ended lower.
The pan-European Stoxx 600 rose 0.57% to 567.77, supported by broad gains across sectors.
France's CAC 40 led the region, surging 1.99% to 8,077.00 as investors welcomed signs of political stability following the reappointment of prime minister Sébastien Lecornu.
In contrast, Germany's DAX slipped 0.23% to 24,181.37 and London's FTSE 100 fell 0.3% to 9,424.75 amid weakness in industrials and energy stocks.
"Stocks and futures made gains, while the Dollar took a hit, as growing optimism about a potential Fed rate cut fuelled risk-taking and overshadowed renewed tensions in US-China trade relations," said Patrick Munnelly, market strategy partner at TickMill.
"Global markets have staged an impressive rebound since the tariff-driven selloff in April, buoyed by hopes of further monetary easing after the Fed's September rate reduction and enthusiasm surrounding advancements in AI."
Sentiment in Paris improved after reports that Lecornu was planning to delay a contentious pension reform until 2027, easing concerns of renewed political gridlock.
The proposed changes, which would raise the retirement age from 62 to 64, have been one of president Emmanuel Macron's most divisive policies, sparking widespread protests in 2023.
Markets viewed the postponement as a sign that the government could now secure parliamentary backing for a revised draft budget, bolstering confidence in France's near-term fiscal outlook.
Russ Mould, investment director at AJ Bell, said: "Markets have been lifted by the rekindling of rate cut expectations in the US after comments from Fed chair Jerome Powell which highlighted sluggish hiring were taken as an indication that not one, but two further cuts were very much on the table for 2025."
He added that optimism was also being underpinned by continued interest in technology and AI-related stocks.
"Buoyed by continued deal making in the frothy AI sector, investors seem prepared to overlook the growing number of warnings about the potential for a market correction at the moment, but this earnings season will be crucial if that optimism is to continue."
Eurozone industrial output declines, consumer prices climb in Spain
In economic news, eurozone industrial output declined more sharply in August, though the drop was less severe than economists had anticipated, while inflation in Spain continued to accelerate.
Data from Eurostat showed industrial production across the single-currency bloc fell 1.2% in August, reversing July's revised 0.5% gain but outperforming forecasts for a 1.6% contraction.
The figures highlighted ongoing weakness in the region's manufacturing sector, which has struggled with subdued demand and rising financing costs.
In Spain, consumer prices climbed to 3.0% in September from 2.7% the previous month, matching the country's second-highest inflation rate in over a year.
The rise also exceeded the flash estimate of 2.9% published earlier this month, signalling renewed price pressures even as energy costs stabilise.
LVMH leads luxury plays higher, defence stocks weigh on London
In equity markets, luxury stocks led European markets higher on Wednesday, buoyed by upbeat trading updates from sector heavyweight LVMH and peers across the region.
Shares in LVMH soared 12.22% after the French conglomerate reported a surprise return to growth in the third quarter, with organic revenue rising 1% to €18.3bn following a sluggish first half.
The update reassured investors that demand for high-end goods remained resilient despite economic headwinds.
Christian Dior climbed 11.97%, while fellow luxury names Moncler, Swatch, Hermes and Kering gained between 4% and 8%.
Burberry added 3.32%, extending a recent rebound for the sector.
Elsewhere, Dutch semiconductor equipment maker ASML rose 2.8% after reporting that net bookings had more than doubled year-on-year to €5.4bn, comfortably beating expectations.
Investors appeared to brush off management's warning of weaker Chinese demand, focusing instead on continued strength from the global AI investment cycle.
In contrast, London's FTSE 100 underperformed as defence and consumer stocks dragged.
Babcock International fell 1.9% and BAE Systems lost 1.56% following the announcement of a ceasefire in the Israel-Hamas conflict, while AstraZeneca, GSK, Imperial Brands and British American Tobacco also slipped, weighing on the index.
Reporting by Josh White for Sharecast.com.
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