Europe close: Stocks turn weaker ahead of Fed decision
By Josh White
Date: Wednesday 29 Oct 2025
(Sharecast News) - European shares reversed early gains to close mostly lower on Wednesday as investors awaited the US Federal Reserve's latest policy decision and digested a heavy slate of corporate earnings and economic data.
The pan-European Stoxx 600 slipped 0.06% to 575.40, while Germany's DAX dropped 0.64% to 24,124.21 and France's CAC 40 declined 0.19% to 8,200.88.
London's FTSE 100 outperformed, rising 0.61% to 9,756.14, helped by gains in financial and retail stocks.
Patrick Munnelly at TickMill said "London stocks soared on Wednesday, with the prestigious FTSE 100 hitting an all-time high for the second day in a row.
"The rally was fuelled by upbeat outlooks from pharmaceutical giant GSK and retail powerhouse Next, adding momentum to the market's winning streak.
"Attention is now turning to the upcoming monetary policy meeting of the U.S. Federal Reserve."
Russ Mould, investment director at AJ Bell, noted that "a positive mood on Wall Street extended into European markets on Wednesday on increased hopes for a US-China trade deal."
Markets have fully priced in a 25-basis point rate cut from the Fed, with traders expecting further reductions in December and January as policymakers contend with a weakening labour market and uncertainty stemming from president Donald Trump's shifting tariff policy.
The ongoing federal government shutdown was also limiting the availability of key data, complicating the central bank's decision-making process.
Investors were also watching trade talks between Trump and China's president Xi Jinping in South Korea, with hopes for progress on a long-awaited deal.
UK mortgage approvals unexpectedly rise
In economic news out of the UK, mortgage approvals unexpectedly ticked higher in September, signalling resilient housing demand despite broader economic headwinds.
According to the Bank of England's latest Money and Credit Report, net mortgage approvals rose by 1,000 to 65,900, while borrowing increased to a six-month high of £5.5bn.
The effective interest rate on newly drawn mortgages fell to 4.19%, its lowest since January 2023.
Richard Merrett, managing director at mortgage broker Alexander Hall, said the data "reinforces the positive market sentiment and consistency that we've seen across the mortgage sector throughout 2025," adding that confidence remains strong despite economic uncertainty.
He noted that while some buyers may pause ahead of the Autumn Budget, a potential base rate cut before Christmas "would help fuel renewed momentum and set the stage for a strong start to 2026."
Across the Atlantic, US mortgage applications surged 7.1% in the week to 17 October, breaking a month-long decline as lower interest rates boosted refinancing and home-purchase demand.
Meanwhile, the Bank of Canada cut its benchmark rate by 25 basis points to 2.25%, as expected, but signalled that policy is likely to remain on hold for the rest of the year.
The central bank said its current stance was "about the right level" to balance inflation near 2% with ongoing economic weakness, while TD Securities noted that the move "should reinforce a high bar for the Bank to cut again this year."
Earnings drive stock moves across the continent
On corporate fronts, several earnings updates drove stock-specific moves across Europe.
Temenos surged after raising full-year forecasts, while UK retailer Next also jumped on an upgraded annual outlook.
Mould said "it is hard to think of a company which has mastered the art of being on the stock market better than Next.
"The company consistently pitches its guidance conservatively allowing it to then surpass expectations when it comes time to report on trading."
Swedish engineering group Sweco advanced on solid quarterly results.
Mercedes-Benz Group gained despite reporting a 70% slump in third-quarter operating profit to €750m, as investors welcomed its cost-saving plans and resilience amid Chinese demand and US tariff pressures.
Banking stocks were also in focus - Santander rose after reporting record nine-month profits, up 7.8% year-on-year, supported by efficiency gains and stable loan performance, though its UK arm delayed results amid a court ruling related to motor finance commissions.
Deutsche Bank gained after posting a stronger-than-expected €1.56bn quarterly profit, driven by steady progress across all business divisions.
UBS fell despite beating profit and revenue forecasts with a $2.5bn quarterly net income.
GSK's shares also gained on another strong quarter.
Mould said that "GSK's shares have really got a shot in the arm this month and that's been topped off by the company delivering a strong third-quarter performance.
"After a string of positive news on drug developments the company has delivered a sizeable upgrade to full-year guidance following strong sales growth and evidence that efforts to streamline the business are paying off."
He said "Outgoing CEO Emma Walmsley's efforts in the job may not have been rewarded by the market during her tenure but this update at least suggests she is handing over a business which is in pretty rude health."
Mining stocks also performed strongly - Glencore's shares rose nearly 6%, with Munnelly noting that "third quarter copper output increased 36% quarter-on-quarter to 239.6 kt, supported by KCC and Mutanda in Congo, and Antamina and Antapaccay in Peru.
"Full year copper production guidance is tightened to 850 to 875 kt, and energy coal guidance is raised to 92 to 97 mt."
Adidas edged lower following confirmation of its preliminary results, while WH Smith fell after postponing its full-year results to 16 December.
Munnelly noted the company "postponed FY results to 16 December from 12 November, pending Deloitte's financial review conclusion by November 2025.
"The review was initiated after a financial discrepancy of about £30m was discovered."
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN