European Markets Rise as Stocks Open Higher Despite Puig Collapse and Global Oil Shock

European stock markets opened Friday on a positive note, with major indices posting gains despite growing geopolitical tension and mixed economic signals across the region. The pan-European Stoxx 600 rose nearly 0.5% in early trading, extending a week-long rally that has been supported by optimism in global equities and steady corporate earnings sentiment.

London’s FTSE 100, Germany’s DAX, France’s CAC 40, and Italy’s FTSE MIB all traded in the green, each adding between 0.3% and 0.7%. If gains continue through the session, European markets are set to record their fourth consecutive day of advances, with the Stoxx 600 already on track for a weekly rise of more than 2%.

In one of the biggest corporate shocks of the day, Spanish beauty giant Puig saw its shares plunge more than 13% after discussions with U.S. cosmetics leader Estée Lauder over a potential business combination were officially terminated.

The abrupt end of negotiations triggered heavy selling pressure in Madrid trading, wiping out recent investor optimism surrounding a possible global beauty industry consolidation. In contrast, Estée Lauder shares surged more than 10% in after-hours trading, as investors welcomed the company stepping back from the deal.

Market analysts suggest the collapse reflects growing caution in large-scale cross-border mergers amid volatile global conditions and shifting consumer demand.

Energy markets remained a key driver of investor sentiment, with Brent crude rising more than 2% to above $105 per barrel. The rally follows renewed concerns over supply disruptions linked to rising tensions between Iran and broader regional powers.

The spike in oil prices has intensified fears of prolonged inflationary pressure, especially in Europe where energy costs remain a sensitive economic issue. Traders say volatility is likely to continue as geopolitical developments remain unpredictable.

Fresh data from the United Kingdom showed retail sales fell by 1.3% in April, reversing gains from the previous month. Fuel sales dropped sharply by more than 10%, suggesting that households are tightening spending amid high prices and economic uncertainty.

At the same time, government borrowing figures came in worse than expected, reaching £24.3 billion for April. Rising public debt levels have added pressure on fiscal policymakers as the UK economy continues to navigate inflation, slowing consumption, and global uncertainty.

Investors are also focusing on upcoming economic indicators, including Germany’s GfK consumer confidence report and French business sentiment data. These reports are expected to provide clearer signals on how rising energy prices and global tensions are affecting Europe’s largest economies.

Meanwhile, bond markets reacted to fiscal concerns, with UK 10-year gilt yields dipping slightly to 4.923%, while the pound remained relatively stable against the US dollar. Overall, traders remain cautious but optimistic as markets balance economic fragility with steady corporate performance.

source: Cnbc