EUROPEAN EQUITIES UPDATE: Indices lower as traders digest Trump-Putin summit

STOXX 600: -0.1%

• European bourses opened modestly lower across the board, and the risk tone continued to deteriorate as the morning progressed, with all major indices falling into negative territory; currently at lows.


• Nothing fresh behind the deterioration of the risk tone, but perhaps as traders reacted to the US President Trump – Russian President Putin summit on Friday. To recap, Trump was ultimately fairly upbeat, describing it as “a 10”, Trump indicated the US is willing to offer security guarantees to Ukraine, but stressed it would be outside of NATO. The Russian side also expressed optimism, but did note that he would freeze the front line should Ukraine fully withdraw from Donetsk and Luhansk.


• So whilst expectations of a peace agreement going into that meeting were not high, traders have seemingly been left disappointed – and this has been reflected in price action this morning.


• Now focus turns to the bi- and multilateral meetings later. Firstly, Trump will meet his Ukrainian counterpart at 18:00 BST, before holding a meeting around 15 minutes later. Thereafter, a multilateral meeting between Zelensky/Trump/European leaders at 20:00BST.


• Eurasia’s Rahman said, "European leaders have 3 main goals in DC today 1) pin down more details on possible US security guarantees; 2) work on preparations for the possible trilateral Putin, Zelensky & Trump meeting, and 3) push back forcefully on the idea of “land swaps".

Sectors: Mixed

• European sectors are split down the middle, in quiet trade.


• Utilities take the top spot, joined closely by Real Estate and Health Care; the latter has been buoyed by upside in heavy-weight Novo Nordisk (+4.8%). The Co. benefits after receiving accelerated US FDA approval for liver disease MASH. As for Real Estate, the sector has been boosted by TAG Immobilien (+1.5%), after the Co. announced plans to increase its payout ratio for the 2026 dividend.


• To the bottom of the pile resides Basic Resources, which is hampered today amidst broadly lower underlying metals prices. Banks and then Autos complete the bottom three.


• It is worth highlighting that defence names are broadly in the green today, in the aftermath of Friday’s Trump-Putin summit (details above). The likes of BAE Systems (+2.2%) and Rheinmetall (+2.3%) both move higher in reaction.

Others:

• Vestas Wind Systems (+16%) – US provides new guidance on renewable tax credits, essentially clarifying that projects can qualify under the One Big Beautiful Bill’s safe-harbour provision if they show physical work and not just early spending, to then access the Inflation Reduction Act credit. Analysts at RBC suggest that this benefits Vestas as it eases concerns of more stringent qualification requirements.

US Equity Futures: ES -0.1%, NQ -0.1%, RTY -0.1%

• Futures are very modestly lower across the board, with the downbeat mood seemingly a continuation of the pressure seen in Europe.


• Data docket is exceptionally quiet today, but all focus will be on the US President Trump’s meeting with Ukrainian President Zelensky and other European leaders.

18 Aug 2025 - 09:55- ForexEU Research- Source: Newsquawk