European equities open lower as French PMI stokes growth concerns

• Eurostoxx down 0.3%
• Germany's DAX off 0.5%
• France's CAC 40 lower by 0.6%
• UK FTSE down 0.2%
• Spain's IBEX dipping 0.1%
• Italy's FTSE MIB unchanged

European benchmarks are starting the session modestly in the red, with the more guarded risk tone from the previous day lingering. For now, sellers are not pressing as hard, yet there is hardly any cause for optimism among investors.

Wall Street's drop on the prior day is still hanging over broader sentiment, and worries about AI-linked stocks plus higher crude prices are keeping investors on edge. US futures also look subdued, with S&P 500 contracts down 0.1% at the moment.

Early data is doing little to lift the mood either. France's flash purchasing managers' index for October came in well below expectations, dropping to 48.4 from September's 51.1 on the composite gauge. That signals a renewed contraction across France's private sector, with output in manufacturing and services both weakening as demand softens and political uncertainty grows.

Even so, it may be premature to draw broad conclusions from France on its own. The German and euro area PMI readings are still ahead, and those should make clearer whether the weakness is becoming more widespread.

For European equities, the worry is that fading growth expectations are piling onto an uneasy mix of elevated government bond yields, unresolved fiscal questions and more vulnerable global risk appetite.