Eurozone Private Sector Growth Drives European Stocks Near Record Highs Amid French Weakness and German Industrial Recovery

Brussels | EcoPulse24

Economic activity data from the eurozone bolstered a rally in European stocks, with major indices nearing record levels. PMI surveys showed a clear improvement in German industry, contrasting with near-stagnant performance in France and relative stability in services across the region.

Markets and Equities

The Euro Stoxx 50 index rose 0.8% to around 6,100 points, close to historical highs, while the pan-European Stoxx 600 added 0.5% to 629 points. The gains were driven by strong PMI readings and reassurances from ECB President Christine Lagarde regarding her term completion, which eased institutional concerns. Trading volumes focused on industrial and luxury goods shares; Moncler jumped 11% after Q4 revenues grew 7%. Anglo American saw a 1% gain despite dividend cuts, while Danone slipped 0.1% despite outperforming sales and cash flow expectations.

In Germany, the DAX surpassed 25,100 points, supported by gains in Airbus, Adidas, and Porsche Automobil, as well as defense firms Rheinmetall and Hensoldt. Conversely, Bayer, Infineon, and Zalando faced selling pressure. Outside the main index, Thyssenkrupp rose over 3% following a positive recommendation.

Eurozone Private Sector Activity

The eurozone composite PMI climbed to 51.9 in February from 51.3, marking the fastest expansion since November, driven by the strongest industrial output increase since August 2025 and accelerating services activity. Services PMI reached 51.8 versus 51.6, signaling modest growth, amid slowing new orders and stable employment after five years of continuous growth. Total new orders rose only marginally, with external demand remaining weak. Input cost inflation accelerated to a 34-month high, while selling prices moderated.

Germany: Industrial Recovery

The German composite PMI rose to 53.1 from 52.1, a four-month high. Manufacturing PMI hit 50.7, breaching the 50 threshold for the first time since June 2022, with the strongest rise in new orders in nearly four years and increased export orders. Services PMI reached 53.4, the highest in four months, despite the fastest employment decline since mid-2020. Input costs saw the largest increase in three years, with only partial pass-through to final prices.

France: Broad Stagnation and Industrial Decline

The French composite PMI improved to 49.9 from 49.1 but remained below the expansion threshold. Services PMI was 49.6, exceeding expectations but still contracting, with new business falling at the fastest pace since July. Manufacturing PMI fell to 49.9 from 51.2, as new orders and exports declined, though output continued to grow at a slower pace. Input cost inflation slowed, while product prices rose at the fastest rate in 18 months.

United Kingdom

The FTSE 100 rose 0.3%, heading for a weekly gain of nearly 2%, supported by the strongest retail sales growth in 20 months and a record budget surplus, boosting bank stocks and tempering interest rate cut expectations.

EcoPulse24 Analysis:
The European landscape reflects uneven recovery. Germany is regaining industrial momentum, shifting from a drag to a potential growth engine, while France remains a relative weak spot with prolonged demand stagnation. Regionally, activity expansion is accelerating, but external demand and employment remain fragile. Markets are focused on monetary stability signals from the ECB and improving industry performance, explaining the indices' approach to record highs despite persistent cost inflation. The current phase suggests a gradual transition from fragile growth to more balanced recovery, provided global demand holds up in the coming months.