Europe close: Markets end the week on a high
By Josh White
Date: Friday 24 Oct 2025
(Sharecast News) - European stocks ended mostly higher on Friday, extending recent gains as major indices continued to hover near record highs.
The pan-European Stoxx 600 advanced 0.23% to 575.76.
Germany's DAX added 0.13% to 24,239.89, while France's CAC 40 was little changed at 8,225.63.
In London, the FTSE 100 outperformed, rising 0.7% to 9,645.62.
Russ Mould, investment director at AJ Bell, said the FTSE 100 "held firm after last night's record close, with strength in banks and tech stocks offsetting weakness in the natural resources space."
He added that "trade relations were front of mind for investors ahead of Donald Trump's visit to Asia and a new fight between the US and Canada," noting that "a lot is riding on Trump's negotiations with China's Xi Jinping as tensions have been riding high."
Markets struggled for direction earlier in the session as investors weighed whether to take profits following weeks of steady gains across the region.
The DAX, CAC 40 and FTSE 100 have each reached record highs in recent weeks, reflecting optimism over easing inflation and expectations of interest rate cuts in major economies.
"The market would love clarity on trade agreements between the US and China, and the avoidance of sky-high tariffs," Mould said.
"It's impossible to say whether that will happen, such is the unpredictable nature of Trump, but any positive takeaways could have a major impact on financial markets next week."
US inflation accelerates, business activity expands in eurozone
In economic news, US inflation accelerated modestly in September, offering the final major data point before next week's Federal Reserve policy meeting.
The consumer price index rose 0.3% on the month, easing slightly from August's 0.4% increase, while the annual rate ticked up to 3% from 2.9%, its highest level since January, according to the Bureau of Labor Statistics.
The largest contribution came from food prices, while energy costs rose 2.8%.
Core CPI, which excludes food and energy, eased to 3% from 3.1%.
Patrick Munnelly, market strategy partner at TickMill, noted that "the release of September's CPI data by the BLS is a rare exception, as all other reports remain on hold until regular US government operations resume."
In Europe, business activity expanded at its fastest pace in 18 months, driven by resilience in the services sector.
The flash S&P Global/HCOB composite PMI rose to 52.2 in October from 51.2, comfortably above expectations and marking a tenth straight month of growth.
Services activity hit a 14-month high of 52.6, while manufacturing steadied at 50.0.
Germany led the region's expansion, with its composite PMI climbing to a 29-month high of 53.8, offsetting continued weakness in France, where output contracted for a 14th consecutive month.
Cyrus de la Rubia, chief economist at HCOB, said "France is increasingly becoming a drag on the eurozone economy," noting that political uncertainty under prime minister Sebastien Lecornu was fuelling unease and weighing on business confidence.
The UK economy also showed signs of strengthening in October, with activity rising across both services and manufacturing.
The flash S&P Global composite PMI increased to 51.1 from 50.1, exceeding forecasts and marking a sixth consecutive month of expansion.
Manufacturing output turned positive for the first time in over a year, with the PMI climbing to 49.6 from 46.2, while services activity edged higher to 51.1.
Survey respondents cited restocking and a tentative pickup in domestic demand, though some automotive suppliers continued to face disruptions linked to the recent cyberattack on Jaguar Land Rover.
Inflationary pressures eased to their lowest level since late 2024.
Separately, UK retail sales recorded their strongest quarterly performance in over two years, supported by warm weather and robust consumer demand.
The Office for National Statistics said sales volumes rose 0.9% in the three months to September, the best since summer 2022, as purchases of summer clothing and gold jewellery surged.
On a monthly basis, sales climbed 0.5%, defying expectations for a decline, while annual growth accelerated to 1.5%.
Munnelly highlighted that "UK retail sales showed strong performance in September, with headline sales up 0.5% month-on-month and ex-fuels rising 0.6%, both outperforming forecasts."
He added that "these solid figures suggest consumers are adapting pragmatically, and once budget uncertainties ease, further improvement is possible."
NatWest rises in London, HIAB slumps on fall in sales
European equity movers were led higher by strong performances in the financial and technology sectors on Friday.
NatWest Group rose 4.9% after the UK lender lifted its income and returns guidance for 2025 on the back of a robust third-quarter performance.
The bank reported a 35.1% surge in net profits to £1.68bn, supported by "healthy levels of customer activity."
Russ Mould said "being fully privately owned seems to be suiting NatWest, with the company's third quarter update the latest in the sector to help ease concerns about contagion from US private credit issues."
He added that "traditional lending activities - in both the mortgage and corporate market - helped the company to beat quarterly profit forecasts by an eye-catching amount and have seen guidance for the full year on income and returns nudged higher."
Mould also noted that "NatWest has managed to keep a tight rein on costs which has helped amplify its strong underlying performance," but cautioned that "investors will be expecting a major deal from NatWest at some point," which could generate both excitement and nervousness given its history of ill-fated acquisition sprees.
London Stock Exchange Group gained 4.8%, extending the previous session's rally after the company raised its full-year outlook, announced a fresh share buyback, and confirmed the sale of a 20% stake in its post-trade services business.
Swedish technology group Lagercrantz advanced 7.8% after posting double-digit growth in both revenue and profit for the second quarter, bolstered by the acquisition of five companies in the first half of the year.
On the downside, Swedish crane manufacturer HIAB slumped 13.4% after reporting a double-digit decline in first-half sales and a 24% drop in comparable earnings, as weaker demand in the US weighed on profitability.
Reporting by Josh White for Sharecast.com.
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