European stock markets traded mixed on Thursday as declining oil prices, lower government bond yields and fresh economic data influenced investor sentiment. UK equities outperformed their continental counterparts, while corporate earnings and trading updates drove movements in individual shares.
The FTSE 100 gained 0.8%, supported by advances in several UK-listed companies. France’s CAC 40 rose 0.4%, while Germany’s DAX declined 0.3%.
Eurozone government bond yields moved lower, following a similar decline in US Treasury yields overnight. Oil prices also weakened, while the US dollar retreated from an 18-month high.
The moves followed comments from San Francisco Federal Reserve President Mary Daly, who indicated on Wednesday that an interest rate increase was unnecessary at the Federal Reserve’s 27–28 October policy meeting.
Investors also assessed higher inflation in France and modest economic growth in the UK, alongside quarterly earnings announcements from major European companies.
US Dollar Retreats as Bond Yields Ease
Government bond yields declined across Europe as investors responded to developments in US monetary policy expectations.
The movement followed an overnight fall in US Treasury yields, while the dollar weakened from its highest level in 18 months.
San Francisco Fed President Mary Daly indicated that the central bank did not need to raise interest rates at its forthcoming October meeting.
Her comments contributed to market expectations that US borrowing costs would remain unchanged in the near term.
Lower bond yields can influence equity valuations by reducing the returns available on government debt, although their effect on individual sectors varies.
Meanwhile, declining oil prices added another factor to the trading session, potentially easing some inflationary pressures while weighing on the outlook for energy-related revenues.
French Inflation Accelerates to 3.1% in September
Economic data from France showed a further increase in consumer price inflation during September.
According to final figures from the national statistics office INSEE, annual consumer price inflation rose to 3.1%, compared with 2.4% in August.
The increase was driven primarily by higher energy and fresh food prices.
The September reading matched an inflation rate last recorded in January 2024, highlighting renewed price pressures in the French economy.
Inflation measured using the European Union’s harmonised methodology increased to 3.4%, in line with the initial estimate, from 2.6% in the previous month.
The figures provided further evidence of accelerating consumer prices in France, potentially complicating the broader inflation outlook for the eurozone.
Investors continue to monitor inflation developments for their implications for European Central Bank monetary policy.
UK Economy Expands 0.1% in August
The UK economy recorded modest growth in August, according to figures released by the Office for National Statistics.
Gross domestic product increased by 0.1% compared with July, when the economy expanded by 0.4%.
Although growth slowed considerably from the previous month, the result was stronger than economists’ expectations for a 0.1% contraction.
The increase was supported by growth in industrial production, which was partly offset by a decline in construction activity.
The figures suggested that the UK economy continued to expand, albeit at a slower pace, despite weakness in parts of the domestic economy.
The data provided additional context for investors assessing the outlook for economic activity and future monetary policy decisions.
Ericsson, TotalEnergies and Pernod Ricard Advance
Corporate developments contributed to gains across several European stocks.
Swedish telecommunications equipment manufacturer Ericsson (NASDAQ:ERIC) recorded a sharp increase in its share price after third-quarter operating profit exceeded analysts’ expectations.
Swiss bakery company ARYZTA (TG:YZA0) also advanced strongly after appointing Urs Jordi, previously interim Chief Executive Officer and Chairman, as its permanent Chief Executive Officer.
French energy group TotalEnergies (EU:TTE) moved higher after forecasting third-quarter hydrocarbon production of between 2.45 million and 2.50 million barrels of oil equivalent per day.
The production outlook provided investors with an indication of the company’s operational performance during the period.
Meanwhile, spirits producer Pernod Ricard (EU:RI) gained after reporting a quarterly sales decline that was smaller than analysts had anticipated.
The movements highlighted the influence of company-specific results and management announcements on European equities.
Dunelm, British Land and Big Yellow Lead UK Corporate Gains
Several UK-listed companies recorded notable share price increases following trading updates and strategic developments.
Homeware retailer Dunelm Group (LSE:DNLM) advanced after reporting a 1.1% increase in first-quarter sales.
Commercial property company British Land (LSE:BLND) also gained after indicating that it expects strong growth in interim profit and rental income.
The announcement provided a positive indication of the company’s expected financial performance for the first half of its reporting year.
Self-storage operator Big Yellow Group (LSE:BYG) moved higher following renewed attention to its strategic options.
The company said it continued to consider all available opportunities to maximise shareholder value after activist investor Ancora Holdings called for a strategic review.
The developments supported UK equities during a session in which the FTSE 100 outperformed major continental European indices.
TomTom, Mondi and Entain Decline Following Trading Updates
Elsewhere, several European companies came under selling pressure following operational and financial announcements.
Dutch digital mapping specialist TomTom (EU:TOM2) declined sharply after announcing workforce reductions and lowering the midpoint of its 2026 revenue guidance.
The revised outlook and restructuring measures raised concerns about the company’s near-term trading performance.
Packaging manufacturer Mondi (LSE:MDNI) also fell significantly after reporting a decline in underlying EBITDA for the third quarter compared with the corresponding period last year.
Gambling and sports betting group Entain (LSE:ENT), which owns Ladbrokes, also moved lower despite reporting a 2% increase in group net gaming revenue for the third quarter of 2026.
The negative market reactions demonstrated that modest revenue growth or operational adjustments were not necessarily sufficient to support share prices amid changing investor expectations.
Overall, European markets remained mixed as investors balanced declining bond yields and oil prices against inflation concerns, slowing economic growth and differing corporate results.
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