European equity markets are trading without clear direction on Tuesday, as muted volumes reflect investor caution ahead of a series of important data releases that could provide clearer guidance on the outlook.
Sentiment remains restrained amid ongoing concerns around tariffs and geopolitical tensions, while stock-specific moves are largely being driven by individual corporate developments rather than broader market conviction.
Uncertainty has been reinforced by comments from U.S. President Donald Trump, who said that any country continuing to do business with Iran would face a 25% tariff on all trade with the United States, a move that has added to global trade and political worries.
By mid-session, Germany’s DAX was up around 0.2%, while the UK’s FTSE 100 was hovering just below flat. France’s CAC 40 was underperforming slightly, down about 0.2%.
UK stocks mixed as company news drives moves
In London, Whitbread (LSE:WTB) jumped 4.7% after the hospitality group said the cost impact of the UK Budget would be lower than previously anticipated, easing pressure on margins.
Diageo (LSE:DGE) initially rose close to 2% on reports that the drinks group is exploring strategic options for its China operations, including a potential sale, although gains later faded to around 0.25%.
A number of stocks posted solid advances of between 1% and 2%, including Pershing Square Holdings, Mondi, Barclays, British Land, Prudential, Pearson, Informa and Shell.
On the downside, Kingfisher slid about 4%, while Games Workshop fell roughly 3%. Rentokil Initial, ICG, Persimmon, Howden Joinery, Smith & Nephew, Berkeley Group Holdings, Centrica, InterContinental Hotels Group, Barratt Redrow, NatWest Group and Endeavour Mining declined between 1% and 2.4%.
Autos weigh on Germany; selective gains elsewhere
German equities were held back by weakness in the auto sector, with BMW, Daimler Truck Holding, Porsche Automobil Holding and Mercedes-Benz all trading lower.
Continental dropped 2.7%, while Fresenius Medical Care, Bayer, Heidelberg Materials, GEA Group, Deutsche Post and Qiagen were down between 1% and 2.2%.
In contrast, Symrise surged 4.2% after announcing it is in advanced talks with potential buyers regarding the sale of its terpenes business. Zalando climbed 4% after Barclays upgraded the stock to overweight and raised its price target to €35, up from €28.
Infineon gained 1.3%, while Commerzbank, SAP, Deutsche Bank, MTU Aero Engines and Allianz edged higher.
France sees broad weakness, with pockets of strength
In Paris, Saint-Gobain fell more than 4% and Vinci slipped 3.2%. Stellantis, EssilorLuxottica and Bouygues declined between 1.7% and 2%, while ArcelorMittal, Kering, Teleperformance, Publicis Groupe, Veolia Environnement, Engie and Renault also traded lower.
On the positive side, Bureau Veritas, Eurofins Scientific, TotalEnergies, Société Générale and Safran posted gains of 0.5% to 1.2%. Airbus added around 0.7% after reporting deliveries of 793 commercial aircraft to 91 customers in 2025, up from 766 in 2024 and 735 in 2023.
Economic data offers limited support
On the macro front, data showed France’s central government budget deficit narrowed to €155.4 billion at the end of November 2025, compared with €172.5 billion a year earlier.
In the UK, retail sales growth slowed in December despite the holiday season, according to the British Retail Consortium. Total retail sales rose 1.2% year on year, down from 3.2% growth in the same period last year.
Food sales increased 3.1%, while non-food sales fell 0.3%. In-store non-food sales declined 0.5%, and online non-food sales slipped 0.1%, although online penetration edged slightly higher to 38.6% from 38.5% a year earlier.
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