Europe close: Stocks finished flat on mixed earnings, economic data
By Benjamin Chiou
Date: Wednesday 30 Jul 2025
(Sharecast News) - European stocks were struggling for direction on Wednesday, with markets mostly mixed as investors digested another flurry of corporate earnings and economic data.
Meanwhile, nerves were setting in as traders eyed US tech earnings, along with rate decisions from the Bank of Canada and Federal Reserve, with the US central bank chief Jerome Powell expected to announce another pause on cuts amid inflation uncertainty despite pressure from Donald Trump to cut rates.
"There isn't going to be much peace for investors regardless of the Fed decision, swiftly followed as it is by Microsoft and Meta numbers. The rally in equities looks increasingly ragged, and is probably overdue some corrective action. A disappointing set of numbers today and tomorrow might spark the pullback many are still waiting for," said Chris Beauchamp, chief market analyst at IG.
The Stoxx 600 index finished more or less flat, with small losses in London and Zurich offset by small gains in Frankfurt, Madrid and Paris and a 1% surge in Milan.
Economic data steals focus
In macro news, the eurozone economy managed to defy forecasts and expand by 0.1% in the second quarter, according to official flash data published on Wednesday. Economists had anticipated zero growth after a 0.6% expansion in the first three months of the year.
A stronger-than-expected economic performance in France and Spain, helped offset a contraction in Germany-the single-currency bloc's largest economy. Earlier preliminary data from German statistics agency Destatis showed German GDP shrank slightly by 0.1% in the second quarter of 2025 from the previous three months.
German retail sales increased more than expected in June, up 1% compared with the previous month. The figure compared with forecasts of a 0.5% increase. On an annual basis, sales rose 4.9% in June compared with May's 2.6% revision.
Across the Pond, US GDP increased at a seasonally adjusted annual rate of 3.0% during the second quarter, well ahead of the 2.5% expansion expected by economists. That followed a 0.5% economic contraction in the first quarter - the first annual drop in GDP since the first quarter of 2022 - after a historic jump in imports weighed heavily on output figures.
Market movers
Sentiment across the auto sector was hit as German auto makers Mercedes-Benz and Porsche revealed they would take a combined €762m hit from tariffs.
Mercedes-Benz said duties would cost it €362m, while Porsche revealed a €400m impact. Trump imposed tariffs of 27.5% on car imports from the European Union and UK. A new EU trade deal has cut that to 15%, while a separate agreement with the UK will see a 10% tariff on the first 100,000 exports.
Also in Frankfurt, the share price of Adidas tumbled 11% after investors ignored a surge in sales at the sports apparel and footwear giant in the second quarter, and focused on the outlook, which has been clouded by higher costs related to tariff disruptions. Chief executive Bjørn Gulden said tariffs will "directly increase the cost of our products for the US with up to €200m during the rest of the year".
French luxury brand Hermes also underwhelmed with a 9% jump in second-quarter revenues, with shares falling nearly 4%. Despite the top-line improvement, net profit declined to €2.2bn in the first half from €2.4bn in the previous year.
On the rise was Swiss bank UBS which more than doubled its second-quarter net profit to $2.4bn, beating market expectations as strong trading revenues and continued client inflows in its wealth management division offset weaker investment banking activity.
In contrast, UK peer HSBC slumped 3% as it reported lower-than-expected first-half profits as it took a large hit from its stake in China's Bank of Communications.
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