Europe close: Stoxx 600 snaps nine-day win streak
By Benjamin Chiou
Date: Tuesday 06 May 2025
(Sharecast News) - European stock markets finished marginally lower on Tuesday, with the Stoxx 600 index snapping a nine-day winning streak on the back of political uncertainty in Germany and nervousness ahead of an interest-rate decision in the US.
Small gains in Milan and Madrid were outweighed by moderate falls in Frankfurt and Paris and a flat performance in London.
As such, the pan-European Stoxx 600 fell 0.2% to settle at 536.35, after having gained 6.1% since 17 April and 13.5% over the past month.
Germany in focus
In Germany, after results from the first round of parliamentary voting shocked markets across Europe, after Friedrich Merz surprisingly failed to secure enough votes to become chancellor. Merz had been widely expected to win the vote and succeed Olaf Sholz six months to the day his government collapsed.
Merz's CDU/CSU/SPD coalition has a nominal 328 votes in the Bundestag - but he received only 310 and fell six short of the majority required to confirm him as the leader of Europe's biggest economy.
It is the first time in Germany's post-war history that a candidate has lost the first round of voting. Merz, 69, leads the centre-right CDU/CSU bloc which won February's snap election with 28.6% of the vote, forcing him to agree a coalition with the socialist party.
Economic data and FOMC
In other news, the final reading of the HCOB eurozone composite PMI output index was revised up to 50.4 for April from the flash estimate of 50.1. Nevertheless, this was down from 50.9 in March, with the services PMI falling to a five-month low of 50.1.
In the UK, the final reading of the S&P Global UK services PMI was revised up marginally to 49.0 from the flash reading of 48.9 released two weeks ago, but well below the 52.5 recorded in March - signalling the steepest drop since January 2023.
Over in the US, Wall Street markets were lower for the second straight day as investors continue to react to newsflow regarding potential trade talks. Reports that the White House was nearing a deal with India were in focus after the South Asian nation proposed zero tariffs on steel, auto components and pharmaceuticals on a reciprocal basis, up to a certain amount of imports.
Meanwhile, markets were awaiting the start of the Federal Reserve's two-day policy meeting, at which the US central bank is widely expected to keep rates unchanged for the third straight meeting.
"We expect [chair Jerome] Powell's recent policy guidance suggesting patience to be reiterated given economic conditions have not shifted in a material way despite looming tariffs," said analysts at TD Securities.
Market movers
Online food delivery company Deliveroo was higher after reaching an agreement with US rival DoorDash on the terms of a recommended final cash offer, with its American rival set to pay £2.9bn for the consolidation. The stock, up 2% on Tuesday, has now risen more than 55% over the past month.
Vestas rose 9% after the Danish wind turbine maker reported an unexpected first-quarter operating profit following a 29% year-on-year increase in revenues to €3.5bn.
Marks & Spencer was lower in London as the retailer continued to pause online orders in the aftermath of last month's cyberattack. The stock has now lost more than 9% since a cyber incident first impacted operations on 22 April.
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