European markets posted modest gains on Tuesday as equities attempted to stabilise after a sharp sell-off at the start of the month.
By early afternoon, the Stoxx 600 had inched up 0.1%, with all major regional indices in positive territory, though sector performance remained uneven. Utilities led the advance, rising around 0.6% as investors rotated into traditionally defensive names. Notable gainers included Danish wind-power firm Orsted, up 3.6%, and Portugal’s EDP, which climbed 1.8%.
In the banking sector, the FTSE 350 Banks index held onto slight gains after the Bank of England cut its estimate of the capital cushion required for lenders — the first such reduction in a decade. The central bank also confirmed that all major U.K. lenders had passed its latest stress tests, which model the impact of severe economic shocks.
“The results of the 2025 Bank Capital Stress Test indicate that the UK banking system would be able to continue to support the economy even if economic conditions turn out materially worse than expected,” the Bank wrote. Shares in Metro Bank and Lloyds Banking Group rose around 1.3%.
Tuesday’s tentative recovery followed a downbeat start to December, with investors increasingly confident that the U.S. Federal Reserve will deliver a quarter-point rate cut at its December 9–10 meeting. Market pricing now assigns an 87.2% probability to such a move. The Bank of England is watching closely for spillover effects, policymaker Megan Greene told CNBC, noting that “about half the moves in our curve actually are generated entirely outside the U.K.”
Economists widely expect the BoE to lower rates in December amid signs of cooling inflation, weak growth and a softening labour market — trends reinforced by last week’s Autumn Budget.
Bayer surges after U.S. backs curbs on Roundup lawsuits
In corporate news, Bayer shares jumped more than 12% after the Trump administration urged the U.S. Supreme Court to limit lawsuits tied to its Roundup weedkiller. The company faces thousands of claims alleging the product causes serious health problems, including cancer, and has already paid billions in settlements.
U.S. Solicitor General D. John Sauer argued that federal pesticide regulations should pre-empt state-level legal challenges — a position echoed by Bayer CEO Bill Anderson, who called the government’s backing “an important step” that would provide “regulatory clarity” for American farmers.
Bayer bought Roundup-maker Monsanto in 2018 for over $60 billion.
Elsewhere, shares in Spain’s Santander rose 1.5% after it sold a 3.5% stake in its Polish arm, Santander Polska, for roughly $473 million, leaving the group with a 9.7% holding.
Euro zone inflation creeps up; U.K. prices ease
Euro zone inflation edged up to 2.2% in November, slightly ahead of expectations. In the U.K., data from the British Retail Consortium showed shop prices falling 0.6% year-on-year in early November, with food inflation dropping from 3.7% to 3%.
Meanwhile, Nationwide reported that annual house price growth slowed to 1.8% in November, taking the average home value to £272,998, down from a 2.4% rise in October.
