European stocks close higher as strong earnings lift investor sentiment

By Mucahithan Avcioglu

ISTANBUL (AA) - European stock markets closed higher Wednesday as strong corporate earnings supported investor sentiment despite geopolitical uncertainty and growing concerns over France's fiscal and political outlook.

The pan-European Stoxx Europe 600 index gained 0.92% to close at 644.49 points, with all four major national benchmarks ending in positive territory.

Germany's DAX led the gains, rising 1.35% to 25,645.04 points, followed by Italy's FTSE MIB, which advanced 1.17% to 49,643.69.

France's CAC 40 climbed 1.06% to 7,921.68, while Britain's FTSE 100 rose 0.19% to 10,752.88.

Investors closely followed the corporate earnings season, with strong results supporting equities despite uncertainty over the region's economic outlook.

Developments in sovereign debt markets also remained in focus as borrowing costs increased in France.

- French borrowing costs rise

French shares advanced despite intensifying protests and fiscal and political uncertainty that pushed the country's benchmark 10-year government bond yield above 5%, its highest level in 24 years.

The spread between French and German 10-year government bond yields widened to as much as 157 basis points, equivalent to 1.57 percentage points.

The widening gap indicated a higher borrowing premium for France relative to Germany, whose government debt serves as the euro area's benchmark.

Higher yields increase the cost of issuing new debt and refinancing maturing obligations, adding pressure to France's public finances.

Meanwhile, economic data released Wednesday showed that Britain's annual inflation rate reached 3.5% in September, its highest level since October 2025, driven by rising fuel prices.

Separately, Britain's total public debt was estimated to have exceeded £3 trillion ($4 trillion) for the first time at the end of September.

The figures highlighted continued pressure on household purchasing power and government finances, even as British equities joined the broader European advance.

Mücahithan Avcıoğlu