EUROPEAN EQUITIES UPDATE: CAC 40 slumps on PM Lecornu's decision to resign

STOXX 600: -0.3%

• European bourses opened mostly and modestly in the red, but then took a leg lower following news that French PM Lecornu resigned - this downside has since pared a touch.


• The CAC 40 currently trades towards session lows and down by around 1.9%. At present, it is unclear why the PM decided to resign, but it comes after recent cabinet appointments received criticism from opposing parties. The outgoing PM is currently on the wires, and we remain attentive for any reasoning for his decision – thereafter, the spotlight shifts to Macron to see if he a) decides to appoint a new PM, b) calls legislative elections, c) resigns – though in the past he has made it clear that he intends to see out his term. The National Rally said "Macron must now choose: dissolution or resignation", via France 24.


• France aside, focus has also been on a few European Construction PMIs (EZ was a touch below the last release) – figures which ultimately had little follow-through. Thereafter, the EZ Sentix Index improved more than expected but still remains subdued. EZ Retail Sales M/M printed in-line with expectations - but also had little impact on price action.


• Data docket for the remainder of the day things out, with more attention now on central bank speakers, including ECB’s Lagarde, Escriva and BoE’s Bailey.

Sectors: Negative

• European sectors hold a negative bias, with only a handful of industries managing to hold in the green.


• Energy tops the pile, with names boosted by strength in underlying oil prices. Telecoms follows in second spot, with Technology completing the top three. For the latter, ASML (+1.4%) received a PT upgrade at HSBC, now sees EUR 1,018 (prev. 809, currently 893).


• Consumer Products is the underperformer today, nothing stock-specific driving things but pressure, which comes alongside the significant sell-off in French stocks following news that the region’s new PM Lecornu resigned; LVMH (-2%), Kering (-2.7%) both moved lower. Banks were also hit on this news, with Credit Agricole (-5.1%) and BNP Paribas (-5.2%) both sinking and now remaining at lows.


• The Autos sector remains towards the mid-point of the pile. Starting in London, with Aston Martin (-6.7%) – the Co. cut its FY25 outlook and no longer expects positive free cash flow in H2 2025. Elsewhere, Stellantis (+1%) gains on reports that the Co. is to invest USD 10bln in the US – as a reminder, it was reported on Friday that Trump may consider “significant” tariff relief for those companies that produce in the US. And finally for Renault (-3.6%), the Co. was initially modestly lower on reports that it is considering cutting up to 3,000 positions globally – and then took another leg lower alongside pressure in French stocks.


• Mining names PT upgrades - Antofagasta (-0.4%) PT upgrade to 2800p (prev. 2000p); Rio Tinto (-0.3%) PT upgrade to 5000p (prev. 4650p); Glencore (+0.7%) PT upgrade to 425p (prev. 350p); Anglo American (-0.2%) PT upgrade to 3300p (prev. 2800p) at Jefferies.

Others:

• SEB -21%; Cuts FY25 Organic Sales Growth "stable to slightly positive" (prev. +2.4%). Notes of weak demand in the US.


• BBVA -2% / Banco Sabadell -1.5% - A top exec at BBVA believes that a large "majority" of institutional investors who hold shares in Banco Sabadell are ready to accept an offer from BBVA, via Bloomberg.


• Mondi -17%; weaker-than-prior EBITDA; Notes of a challenging trading environment on a quarterly basis.

US Equity Futures: ES +0.2%, NQ +0.4%, RTY +0.2%

• Futures are modestly firmer across the board, with some outperformance in the NQ.


• US data today includes Employment Trends (Sep), and then the Fed’s Schmid (2025 voter) will deliver remarks after the US close.

06 Oct 2025 - 10:10- ForexEU Research- Source: Newsquawk