(Sharecast News) - European stock markets moved slightly higher on Wednesday morning, pushing back into record territory despite data showing a big drop in German industrial production.
The pan-European Stoxx 600 was up 0.3% at 570.74 by 0932 CEST, with all major indices across the continent registering small gains.

The Stoxx 600, which hit a new record closing high of 570.45 on Friday, has been rangebound since the start of the week as investors scaled back their risk appetite amid a mounting political crisis in France.

President Emmanuel Macron is now facing calls to hold a snap election following the abrupt exit of newly appointed prime minister Sebastien Lecornu on Monday. Lecornu has now been tasked with holding talks with various parties in an attempt to form a new government, though the pressure is now mounting on Macron to resign in order to end the ongoing political gridlock.

"What began as a deadlock in France has morphed into a slow-motion leadership crisis. Prime Minister Lecornu's attempts at coalition salvage are unraveling, while Macron's former allies now speak of resignation gambits and 'obstinacy in clinging to power'," said Stephen Innes, managing partner at SPI Asset Management.

"This kind of domestic spectacle doesn't just weigh on approval ratings - it seeps into markets, undermining confidence in Europe's ability to hold its fiscal centre."

In economic data, German industrial output dropped 4.3% in August, erasing a revised 1.3% increase in July, according to Destatis on Wednesday. That was the sharpest monthly decrease since March 2022, and well under the consensus forecast of -1.0%. A sharp fall in output across the automotive industry, Germany's largest industrial branch, was largely to blame, with production down 18.5% from July - though partly due to a the combination of annual plant closures for holidays and production changeovers.

In equity news, London-listed motor finance lenders gained after the financial regulator ruled that they are to pay out £11bn in compensation to customers following a probe into "unfair" practices. The redress, which works out to an average £700 per customer, is lower than the £950 originally earmarked, lifting shares of Lloyds, Close Brothers and Barclays.

BMW was a heavy faller after the German auto giant cut its financial guidance for the year, blaming tariffs and weak sales in China.

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