EUROPEAN EQUITIES UPDATE: European Equities choppy, FTSE 100 the biggest loser following Reeves 2p income tax increase

STOXX 600: -0.1%

• European bourses opened mostly firmer but then turned negative. The FTSE 100 (-0.4%) is underperforming this morning out of all European indices. Downside is largely due to weakened market sentiment from news that Reeves is considering a 2p income tax increase as well as Reeves considering a less dramatic cut to the UK's annual cash ISA allowance, while the government is also encouraging ISA providers to revamp their stocks-and-shares savings products. Elsewhere, macro newsflow this morning has been light to explain the choppy trade seen in the wider Eurozone equities.


• Data this morning include German trade data, French Trade data and UK Halifax House prices. However, these have failed to move the market in any significant direction.


• Looking ahead in Europe, today's speakers include ECB's Nagel and Elderson; from the UK, BoE chief economist Pill. Today's CRA schedule includes potential reviews from S&P on Poland (currently A-), DBRS on Poland (A-), and Moody's on Germany (AAA). Notable earnings reports are due today from KKR, CEG, DUK, CNH.

Sectors: Negative/Mixed

• European sectors have opened mixed/negative. At the top is Automobiles & Parts (+1.1%), Media (+0.4%), and Consumer Products & Services (+0.4%). Strong gains in ITV (+19.8%) stock following confirmation that it is in talks of a sale in its M&E business to Comcast (CMCSA) are underway for GBP 1.6bln has given the Media sector some spotlight. In the Auto sector, sentiment has been heightened following reports that the Netherlands are ready to drop control of Nexperia (a key chip for Automobile production) if chip supply resumes, signifying progress on the Nexperia discourse.


• At the bottom is Real Estate (-0.6%), Travel & Leisure (-1.0%) and Optimised Personal Care Drug and Groceries (-0.6%). Real Estate has been weighed down by a heavy loss in Rightmove (-18.4%) after the 2026 profit forecast was cut on higher AI investment. Travel & Leisure has also seen sentiment fall due to IAG (-8.8%) stock sinking due to pre-tax profit fall following Q3 earnings. Optimised Personal Care also saw weakened sentiment due to losses in Dino Poska (-7.5%) after Co. announced Q3 earnings where revenue underperformed against expectation.

Movers:

• Daimler Truck (+2.5%) - Q3 (EUR): Revenue 10.6bln (exp. 11.6bln), adj. Group EBIT 716mln (exp. 729mln), adj. Return on sales 6.3% (exp. 6.3%), EPS 0.57 (exp. 0.68), confirms FY25 adj. EBIT outlook between 3.6-4.1bln. (Daimler Truck)


• Euronext (+2.8%) - Q3 2025 (EUR): Revenue 438.1mln (exp. 439.3mln), Adj. EBITDA 276.7mln (exp. 269.6mln), Net profit 149.7mln (exp. 144.8mln); will launch a share repurchase programme up to EUR 250mln on November 18th.


• ArcelorMittal (+1.9%) upgraded to Overweight from Neutral at JPMorgan

US Equity Futures: ES (+0.3%), NQ (+0.3%), RTY (+0.4%) and YM (+0.2%)

• US equity futures are paring back some of yesterday's weak close following the AI concerns and soft labour market debt from Challengers. One of the key newsflow boosting sentiment is that Trump announced there will be no new tariff announcement coming while the SCOTUS case is pending, adding some stability in the market for the moment.


• Looking ahead we have data from the Prelim University of Michigan sentiment data for November, US NY Fed SCE. Speakers include Fed's Jefferson and Miran.

07 Nov 2025 - 09:55- EquitiesEU Research- Source: Newsquawk