EUROPEAN EQUITIES UPDATE: European bourses are mostly higher, SMI outperforms thanks to strong Nestle results

STOXX 600: +0.2%

• European Bourses have opened mixed this morning. Downsides can be seen in the DAX (-0.2%) and FTSE 100 (0.2%), whilst a modest upward bias can be seen in CAC 40 (+0.1%) and Euro Stoxx 50 (+0.1%). Sentiment is cautious amid heightened trade tension between the US and China after Trump suggested the US are in a trade war, and tariffs are an important defensive tool. On the other hand, strong earnings from Nestle and TSMC have boosted their respective sectors.


• Looking ahead: Eurozone trade stats for August are due. Speakers ahead included ECB chief economist Lane, ECB President Lagarde; ECB supervisory members Machado and Donnery, BoE's Mann (Hawk), BoE's Greene (Hawkish). On that note, the BoE Credit Conditions Survey had little impact.

Sectors: Negative/Mixed

• European sectors were mixed at the open. The Consumer Staples (+1.7%) sector has emerged as the biggest winners today, thus far driven by gains in Nestle (+7.5%) after the giant posted strong earnings, where organic sales grew by 3.3% in the first nine months of 2025.


• Consumer discretionary (-0.2%) is the worst performer at the time of writing, amid broker downgrades for luxury stocks such as LVMH (+0.1%) and Kering (-2.2%), which have either consolidated or pulled back following yesterday’s gains, with other luxury brands such as Hermes (-1%) also feeling some pressure.


• Upside is seen in the IT sector (+0.6%) due to record-level net profits for TSMC amidst the AI boom, increasing sentiment in the tech space. Upsides in ASML (+1.5%) underpin the European tech sector.

Others:

• Kinnevik (KINVB SS) +5% - Q3 (SEK): Net asset value 37.5bln (prev. 37.8bln Q/Q), private portfolio +3%, NAV growth of 2% despite facing continued currency headwinds and weaker peer multiples.


• Croda (CRDA LN) +4.1 - Q3 (GBP): Revenue 424.7mln (prev. 406.6mln Y/Y).


• Pernod Ricard (RI FP) +2% - Q1 (EUR): Revenue 2.38bln (exp. 2.35bln). Organic Rev. by region: Asia-Rest of World -7% Y/Y. Europe -4% Y/Y. Americas -12% Y/Y. For FY26, expect improving trends skewed towards H2. FX impact exp. to be significantly negative.


• Whitbread (WTB LN) -8.1% - H1 (GBP) - Revenue 1.541bln (exp. 1.535bln), Net income 217mln (exp. 239mln), on track to deliver a step-change in profitability and shareholder returns of GBP 2bln by FY30.


• Merck (MRK GY) -1.3% - Slightly improved its mid-term guidance for its healthcare business; affirms FY25 outlook. Affirms guidance. Lifts mid-term healthcare business annual organic rev. growth in “low mid single digit” (prev. “slight” growth).

US Equity Futures: ES (+0.2%), RTY (+0.2%) and NQ (+0.3%)

• US futures are mildly positive. ES, RTY and YM are up (+0.2%) whilst the NQ narrowly outperforms (+0.3%). Dovish sentiment by several Fed members like Miran and Waller, alongside their discussion on AI has kept sentiment net positive for the US market, although trade war concerns linger with China after Trump announced that the US is in a trade war with China.


• Looking ahead: The US Day sees the release of the Philly Fed manufacturing report, which follows this week's upside surprise seen in the Empire manufacturing survey, and ahead of PMI data due next week. The NAHB will publish its housing market index for October. Today's speakers' slate includes Fed's Waller (voter), Fed's Barr (voter), Fed's Miran (voter), Fed's Bowman (voter), Fed's Kashkari (2026 voter), Fed's Barkin (2027 voter).

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