European and UK Stocks Ease from Record Highs Amid Commodity Weakness and Political Uncertainty

London | EcoPulse24

European and UK stocks closed Friday’s session with modest declines, pressured by weaker commodity prices and renewed political and economic caution, following a rally that pushed several indices to record highs earlier in the week.

In the UK, the FTSE 100 fell 0.2% after closing at a record in the previous session, mainly due to declines in mining and energy shares following corrections in metals and raw material prices. Antofagasta (-3%), Glencore (-2.6%), Anglo American (-2.6%), and Rio Tinto (-2%) were hit by falling copper and tin prices, while Endeavour Mining slid 2.5% as gold and silver gains paused. Despite the daily drop, the FTSE 100 posted a weekly gain of approximately 0.9%, marking its third consecutive week of advances.

In France, the CAC 40 declined 0.3% to around 8,285 points, registering a fifth straight loss after hitting a record high earlier in the week. Essilor (-2.7%) led losses, followed by Kering (-1.5%), Renault (-1.16%), Air Liquide (-0.8%), and TotalEnergies (-0.7%). Defense stocks limited losses, with Thales (+2.1%), Safran (+1.6%), and Airbus (+1.0%) rising, alongside Publicis (+1.6%), Orange (+1.4%), and Eurofins Scientific (+0.7%). Political uncertainty increased after the postponement of 2026 budget discussions to next week due to lack of parliamentary consensus.

In Germany, the DAX 40 closed down 0.2% at 25,276 points, reversing modest gains from the previous session amid ongoing geopolitical tensions in Iran and friction between the US and Europe. German inflation was confirmed at 1.8% in December 2025, down from 2.3% in November and below the ECB’s 2% target for the first time since September 2024. Among stocks, Brenntag fell nearly 4% after a price target cut from €46 to €42 with a “neutral” rating, while Deutsche Telekom (-2.6%) and Continental (-2.2%) also declined. Conversely, Siemens Energy surged 6.4% on demand linked to the energy transition and AI. The DAX posted a slight weekly gain of 0.1%.

Across the eurozone, indices retreated from record highs: the STOXX 50 slipped 0.3% to 6,021 points, while the STOXX 600 edged down to 614 points. Luxury stocks led losses on warnings of lower Q4 profits, with LVMH, Hermes, and Ferrari all down over 2%, and EssilorLuxottica dropping 4%. BASF fell 3.7% after European natural gas prices jumped over 10% on colder weather forecasts, raising operating costs. In contrast, ASML rose 2% on optimism around technology and AI following strong TSMC results, and Siemens Energy gained over 6% after confirming a dividend. For the week, the STOXX 50 gained 0.5% and the STOXX 600 added 0.7%.

Analysis:
The session reflects a natural correction after historic highs, with pressure shifting from commodities and luxury stocks to support from technology and energy transition sectors. Despite daily declines, weekly gains indicate ongoing, but cautious, positive momentum, dependent on developments in politics, budgets, inflation data, and energy costs in Europe.