European equity markets closed on February 4 with a mixed but resilient performance, as investors balanced strong gains in select national indices against broader softness in eurozone benchmarks. Currency weakness and uneven sector momentum continued to shape end-of-session positioning.

UK and French Equities Lead the Upside

European markets found support from strong performances in the UK and France. The FTSE 100 surged 1.10% to 10,427.99, benefiting from strength in large-cap defensive names, energy stocks, and financials. The index’s heavy weighting toward globally exposed companies allowed it to outperform amid ongoing currency depreciation.

France’s CAC 40 advanced 1.24% to 8,280.74, marking one of the strongest performances across the region. Gains were supported by selective buying in industrials and consumer-linked equities, as investors positioned for earnings resilience despite slowing regional growth. The outperformance highlights continued appetite for high-quality European corporates with global revenue exposure.

Eurozone Benchmarks Face Modest Pressure

In contrast, broader eurozone indices closed slightly lower. The EURO STOXX 50 declined 0.24% to 5,981.14, while the DAX slipped 0.59% to 24,635.44. These declines point to profit-taking following recent rallies and lingering uncertainty around industrial output and export demand.

The MSCI Europe index edged down 0.02%, underscoring the uneven nature of today’s market close. Meanwhile, the Euronext 100 Index gained 0.34%, reflecting relative stability among large, diversified European corporates. The divergence suggests investors are increasingly discriminating, favoring balance sheet strength and pricing power over cyclical exposure.

Currency Weakness Reinforces Defensive Positioning

European currencies closed weaker, reinforcing a defensive macro backdrop. The British Pound Index fell 0.29% to 136.57, while the Euro Index declined 0.17% to 117.99. Currency depreciation often supports export-oriented equities but can also reflect underlying concerns about growth differentials and monetary policy trajectories.

The weaker pound provided a tailwind for UK equities, particularly multinational firms with overseas earnings. Conversely, euro weakness had a more muted impact, as investors remained cautious on the eurozone’s near-term growth outlook. Currency movements continue to act as a key signal for capital flows and regional risk perception.

Looking ahead, investors will be closely watching upcoming macroeconomic data, central bank guidance, and corporate earnings updates for clarity on growth momentum across Europe. Persistent currency weakness could continue to support export-heavy indices, while elevated volatility may limit upside in cyclical sectors. Key risks include slower global demand and tightening financial conditions, while opportunities may emerge in defensive equities, dividend-paying stocks, and companies with strong international revenue streams as markets recalibrate expectations for the months ahead.