EUROPEAN EQUITIES UPDATE: Initial strength now dissipated after Polish PM asks to evoke Article 4

STOXX 600: +0.3%

• European bourses opened mostly firmer across the board, but sentiment has slipped in recent trade as attention turned to geopolitics.


• To recap, Poland shot down several drones over its airspace, which they claimed were Russian. In the aftermath, a slew of European leaders have shown their support for Poland including NATO sources which noted that the alliance said it is not treating the drone as an attack, but there are indications that it was an intentional incursion. No real move on the former, but a bout of pressure was seen after the Polish PM said Poland asked to summon Article 4 of the NATO Treaty – this allows talks to be held for members who feel threatened.


• Elsewhere on the US side of things; US President Trump reportedly asked the EU to hit China and India with 100% tariffs to pressure Russian President Putin to end the war. On the Fed, a US judge temporarily blocked President Trump from removing Federal Reserve Governor Cook.

Sectors: Positive

• European sectors hold a strong positive bias, and with those industries in the red only marginally so.


• Retail is by far and away the clear outperformer today, boosted by post-earning strength in Zara-owner Inditex (+7.5%); the Co. reported fairly in line metrics but saw a strong start to Autumn sales, which has boosted sentiment.


• Technology takes the second spot today, with sentiment lifted following incredibly strong Oracle price action today, with shares soaring roughly 28% in pre-market trade (see US section below for details). The likes of ASML (+0.9%) and SAP (2.4%) both gain. And finally to complete the top three, Industrials (particularly Defence companies) have been boosted amidst the latest developments between EU-Russia. In brief, Poland shot down Russian drones after they violated the region’s airspace.


• Travel & Leisure is found right at the foot of the pile joined closely by Basic Resources.

Movers:

• Novo Nordisk +2.6%; cuts FY25 EBIT guidance, due to one off restructuring costs of DKK 8bln; also to cut 9k jobs. Saxo Bank’s Falkencrone says “large layoffs don’t win prescriptions” and suggests that investors will now look for stronger capacity and faster launches.


• AB Foods -9.5%; sees slow Primary growth, blaming weak consumers.


• BASF +2%; upgraded to Buy from Neutral at Citi


• HelloFresh -2.8%; downgraded to Equal Weight from Overweight at Morgan Stanley


• Pernod Ricard -1.9%; downgraded to Underweight from Equal Weight at Morgan Stanley

US Equity Futures: ES +0.1%, NQ +0.1%, RTY -0.2%

• Futures are mixed, with the ES/NQ holding just above the unchanged mark whilst the RTY underperforms.


• Focus has been on Oracle (+28% pre-market); headline metrics were not so great, but focus has been on the co. issuing a bullish cloud outlook that boosted AI infrastructure hopes, with Oracle's performance also lifting other AI-linked stocks, including Nvidia (NVDA) and Asian chip suppliers.


• Day ahead: US PPI is expected to remain unchanged at +3.3% Y/Y in August; the monthly rate is seen rising +0.3% M/M from 0.9% prior; core PPI is expected to ease to 3.5% Y/Y (prev. 3.7%), with the monthly rate also seen rising 0.3% M/M vs a prior 0.9%. US whole sales are expected to rise 0.2% M/M (prev. 0.3%).


• Barclays raises S&P 500 2026 year-end target to 7,000 from 6,700 (vs 6,512.61 last close); Shifts to Positive on US Tech.

10 Sep 2025 - 10:15- ForexEU Research- Source: Newswires