EUROPEAN EQUITIES UPDATE: China-US trade tension dampens market sentiment

STOXX 600: -0.5%

• European Equities have opened on the backfoot with FTSE 100 (-0.1%), DAX (-0.8%), CAC 40 (-0.7%) and Euro Stoxx 50 (-0.7%) all lower. Growing trade tension between the US and China has dampened market sentiment, after China's MOFCOM announced that it is taking countermeasures against five US-linked firms, adding that the US cannot have talks while threatening new restrictions.


• Data this morning includes; unrevised German CPI, and broadly softer UK jobs report. In detail, the UK added 91k jobs in August (exp. 123k), with the ILO unemployment rate rose to 4.8% (exp. 4.7%, prev. 4.7%). Finally, the ZEW report showed Economic Sentiment improve from the prior, but less than expected, whilst Current Conditions continued to slip. No move on this.


• In France, PM Lecornu is set to deliver the General Policy statement at 14:00 BST after drafting the Finance Bill. Other newsflow ahead includes earnings from LVMH. Speakers include BoE Taylor, Breeden and Governor Bailey. As for the ECB, speakers include Cipollone, Villeroy, Kocher and de Guindos,

Sectors: Negative

• European sectors hold a strong negative bias. The biggest winners within sectors include Telecommunication (+2%), Real Estate (+1.2%) and Utilities (+0.7%). Ericsson (+13%) gains after beating quarterly profit estimates and raising guidance, as well as announcing a 5-year partnership with Vodafone (+0.4%). Real Estate (+0.8%) has been given a boost by Bellway (+5%) after the Co. reported improved profit, refreshed capital allocation framework and initial GBP 150 mln share buyback.


• The biggest losers in sectors are Basic Resources (-2%), Automobiles & Parts (-1.6%) and Energy (-1.4%). Basic Resources has been weighed down by a broader pullback in metals prices. Company performance across the sector is down, although Rio Tinto's (-1.4%) decline was slower compared to the wider sector after the Co. announced that Q3 shipment climbed as Chinese demand steadied.


• The downturn in Automobiles & Parts is driven by losses in Michelin (-9.4%) after the Co. adjusted its 2025 outlook due to further deterioration of the business environment. Elsewhere, sliding crude prices this morning has pressured the Energy sector. Also within the complex was BP (-1.5%) reporting its Q3 update, in which it sees upstream production to increase vs the prior quarter but flagged weaker trading into Q3.

Others:

• Publicis +0.5%; upgraded guidance - Notes of no slowdown in client demand and saw an acceleration in demand for AI-led products and services.


• Sabadell -0.2% / BBVA -1.5%; Sabadell says a large majority rejected the latest BBVA bid.


• TomTom +8%; reports a beat in Q3


• easyJet +2%; initially boosted on MSC takeover-related reports; since rejected by MSC.


• Robert Walters +8%; Q3 shows a slight improvement, though rev. remains low.

US Equity Futures: ES -0.7%, NQ -0.9%, RTY -0.7%

• US futures are lower across the board following upside yesterday after Trump softened his tune on China after proposing a 100% tariff. However, sentiment in the market has reduced after response from China’s MOFCOM stating that the US cannot have talks while threatening to intimidate and introduce new restrictions, which is not the right way to get along with China, therefore reigniting trade tension.


• Ahead focus in the US includes earnings from BlackRock, JPMorgan, Goldman Sachs, Citi and Wells Fargo. Johnson & Johnson are also set to report their earnings. Speakers ahead include Fed Powell, Bowman, Waller and Collins.

14 Oct 2025 - 10:15- EquitiesData- Source: Newsquawk