European Stock Markets End-Day Rally: Dual Index Surge, Euro/Dollar Dip, and ZEW Confidence Jump

European equity markets closed the day on a 0.56% gain, pushing the Stoxx Europe 600 to 643.19 points.

Dual-Rate Surge of the Stoxx Europe 600

■Rose 0.56% to 643.19 points.

■Italy's FTSE MIB 30 climbed 0.81% to 52,285.09 points.

■Britain's FTSE 100 advanced 0.58% to 10,585.91 points.

■France's CAC 40 nudged 0.28% to 8,363.14 points.

■Germany's DAX 40 lifted 0.66% to 25,011.35 points.

UK Political Shuffle Echoes Through Equity and Bond Markets

■New Prime Minister Andy Burnham's promise to boost defence spending lifted defence stocks by roughly 1.2%.

■Bond markets felt heightened selling pressure, while equities showed negative divergence.

■UK unemployment recorded at 4.9%, up 0.2 percentage points year‑on‑year.

Euro/Dollar Dip and Liquidity Flow

■The EUR/USD pair slipped 0.04% to 1.141, reflecting ongoing US‑Iran tensions and liquidity movements.

ZEW Confidence Index: Positive Signals for the Eurozone

■The ZEW Economic Sentiment Index jumped 15.8 points in July, reaching 26.3.

■Euro‑area confidence rose to 23.4 points, up from 13.9 the previous month.

■The regional economic outlook improved from -37.7 to 5.7 points.

Central Bank Policy Outlook and Credit Flow

■Markets remain focused on the European Central Bank’s upcoming rate decision on Thursday.

■Credit expansion, especially the narrowing of SME loans and the pace of commercial credit growth, is being watched closely amid macro‑prudential measures.

Kerem Tufan – Director of Commercial Loans and Central Bank Policies: "The broad rally across European markets stems from a mix of political and macro‑economic drivers. The UK leadership change bolsters defence equities, while the ZEW confidence uplift fuels risk appetite. Yet, the ECB’s rate decision uncertainty and the tightening of SME credit could push borrowing costs higher and tighten liquidity, potentially heightening short‑term market volatility."