European indices enter December trading with a great dose of pessimism, as renewed concerns about AI-driven growth drive worldwide profit-taking and Ukraine peace talks drag on key industrial players in the region.
Aside from “productive” peace talks, as indicated by the US State Secretary Marco Rubio, the broader slump in the European industrial base can be attributed to the lower than expected PMI reading for the manufacturing, with most of the largest EU economies, including fastly growing Spain, posting lower than expected readings.
German DAX is Europe’s worst performer today (DE40: -1.7%), with more than half of the index-listed stocks trading in the red and five names losing more than 2% (Airbus, Rheinmetall, Infineon, MTU Aero, Siemens Energy). French CAC40 (FRA40: -0.9%), Italian FTSE MIB (ITA40: -1.3%), Spanish IBX35 (SPA35: -0.65%) are all deep in the red, while stocks in Poland, Switzerland, Netherlands and the UK are somewhere flat.
Performance of DAX-listed stocks today. Source: Bloomberg Finance LP
Among Stoxx 600 sectors, industrials are taking the biggest hit, as Ukraine peace talks weigh on defense stocks and cast uncertainty over EU policy, which has relied on defense spending to support economic growth. Real estate stocks are also deep in the red, particularly in the UK, as the sector faces a gloomier outlook following property tax measures announced by Chancellor Reeves in the 2026 UK Budget. On the upside, defensive sectors such as consumer goods and healthcare are benefiting from the risk-off sentiment.
Performance of Stoxx 600 sectors today. Source: xStation5
DE40 (D1)
DAX futures fell below all three key exponential moving averages (EMA10, EMA30, EMA100), wiping out nearly all gains from the past four sessions. The decline paused at the 23,450 support level, but ongoing selling pressure from Ukraine peace talks and the contract’s inability to break above EMA100 could trigger a deeper correction. The RSI remains in neutral territory, leaving room for both a rebound or further declines. However, for a sustained downtrend to take hold, the DAX would need to break below the psychological 23,000 level, which may be challenging given the typically positive December seasonality.
Source: xStation5
Company news:
- Airbus has identified a fuselage panel quality issue affecting several dozen A320-family jets, delaying some deliveries. No in-service aircraft appear impacted. The problem comes as Airbus aims for 820 annual deliveries after reaching 657 by November, requiring a record output in December. The stock plunges around 6%.
- Deutsche Telekom and Schwarz Group are in advanced talks to build an EU-funded AI gigafactory in Germany, part of a $23.4bn effort to boost Europe’s AI infrastructure. The consortium, which may include SAP, Ionos, and Brookfield, aims to strengthen computational capacity, digital sovereignty, and Europe’s competitiveness versus the U.S. and China. Deutsche Telekom, already partnering with Nvidia on a €1bn Munich AI cloud, aims to increase Germany’s AI computing power by 50%.
- Puma shares are up for the 3rd consecutive session (+1.5%), after the stock jumped 13% on takeover speculation, with China’s Anta Sports reportedly exploring a bid and potentially involving private equity. Li-Ning and a possible Japanese suitor are also said to be interested. The buzz comes amid Puma’s ongoing turnaround and job cuts, but no formal offer has been made. Moreover, the company opened today its largest-ever European flagship store on Oxford Street, London. Spanning 24,000 sq. ft., it showcases Puma’s performance innovations, alongside lifestyle products.
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