European Stocks Rise Despite Mixed Economic Data and Geopolitical Concerns

European stock markets ended Tuesday on a positive note, with gains across major indices despite a mixed bag of economic data. The pan-European Stoxx 600 climbed 3.01 points, or 0.48%, to close at 636.63. Germany’s DAX led the gains with a 0.77% rise, while Britain’s FTSE 100 added 0.42%. France’s CAC 40 and Spain’s IBEX 35 also saw moderate increases, but Italy’s FTSE MIB stood out with the strongest percentage gain of 0.87%.

Economic indicators released Tuesday painted a mixed picture. German manufacturing orders plummeted 10.6% month-on-month in August, reversing a revised 3.2% increase in July. The decline was driven by a drop in large orders for aircraft, ships, trains, and military vehicles. Eurozone retail trade volume saw a slight uptick of 0.1% in August, rebounding from a 0.6% decline in July. Meanwhile, France’s manufacturing output rebounded 0.3% in August after a 0.8% drop in July.

Bank of Finland Governor Olli Rehn warned that a prolonged Middle East war could elevate energy prices, potentially spreading to other sectors. He noted that while spillovers from higher energy costs had not yet materialized, rising long-term interest rates were slowing growth and limiting the transmission of energy costs to broader inflation. Rehn emphasized that the European Central Bank would continue making interest rate decisions on a meeting-by-meeting basis, given heightened uncertainty.