EUROPEAN EQUITIES UPDATE: Stocks modestly firmer, Basic Resources leads whilst Tech lags

STOXX 600: +0.4%

• European bourses have opened slightly firmer. CAC 40 (+0.4%), FTSE 100 (+0.4%), DAX (+0.1%) and Euro Stoxx (+0.2%) have made modest gains, and with only really European PMIs and PPI in focus.


• To recap those PMIs, Spain Services and Italian Services both beat expectations whilst the French, German and then the EZ-wide metrics were revised a touch lower. The EZ release highlighted that the data will likely “confirm the stance” for those ECB members who opt for no more cuts. Sticking with the ECB, some very marginal upside was seen in the single-currency after ECB President Lagarde said former ECB member Knot would make a “good” President at the Bank, via ANP; for reference, Knot was a hawkish member during his tenure. Now focus will turn to ECB’s Schnabel later in the day, who is also speaking at a Knot farewell symposium.


• On the geopolitical front, Munich airport was temporarily closed following drones spotted but has reopened after. Elsewhere, the Ukrainian Energy Ministry said Russia launched a massive overnight attack on Ukraine infrastructure. And over in the Middle East, it was reported that Hamas may demand fundamental changes to Trump's Gaza deal.


• Looking ahead: ECB's Schnabel to speak and BoE's Bailey are to speak at a Klass Knot farewell symposium.

Sectors: Positive

• European sectors have opened slightly firmer with Banks (+1.0%), Basic Resources (+0.8%) and Retail (+0.6%) leading the way. Gains from Raiffeisen bank (+6.2%) after EU lifts sanctions on Deripaska to compensate RBI has lifted the Banking sector. Companies like Rio Tinto (+0.6%) and Anglo American (+1.3%) have built on gains from uptick in copper prices amid weaker USD following the gov't shutdown. Newsflow has been light to explain the uptick in Retail, although Inditex (+1.4%) and Kingfisher (+0.3%) have made gains driving up the Retail sector.


• Towards the bottom of the pile; Technology has been the worst performing sector, with losses broadbased; ASML (-0.8%) and BE Semiconductor (-2.4%) both on the backfoot. This pressure can be attributed to commentary via Applied Materials which stated that the US BIS Affiliates Rule will cut Q4 revenue by about USD 110mln and reduce FY26 revenue by about USD 600mln.

Others:

• Telecom Italia (+7.0%) - shares have rallied following EUR 1bln investment for digital transformation for the three-year period 2025-27.


• Thyssenkrupp (+4.0%) - Advent and Cinven enlist advisors for IPO of Co.’s former unit.


• UBS (+1.2%) - Funds under the UBS umbrella face over half a billion dollars of exposure to bankrupt auto-parts supplier First Brands Group through various investment strategies, with one ranking as the biggest unsecured creditor, via BBG citing documents.


• JD Wetherspoon (-4.0%) - FY (GBP): Adj. Pretax Profit 81.4mln (exp. 77.5mln), sales 2.13bln (exp. 2.12bln), anticipates a reasonable outcome for the FY. (JD Wetherspoon)


• Bayer (-0.22%) - Xarelto ruling exposes limits of Patents tied to drug trials.

US Equity Futures: ES +0.3%, NQ +0.3%, RTY +0.4%

• US equity futures are firmer across the board. NQ (+0.3), ES (+0.3%) and RTY (+0.4%) have made modest gains in the pre-market. Uncertainty in the market remains in the US market due to gov’t shutdown. However, news on Trump reportedly working with pharma, AI, energy, shipbuilding, battery products and other sectors will have given increased sentiment around US equities. As a reminder that there will be no release of the NFP report due to the gov't shutdown.


• Looking ahead: We have US S&P Service PMI and ISM N-Mfg. PMI data and Fed Speakers includes Jefferson and Williams.

03 Oct 2025 - 10:25- EquitiesEU Research- Source: Newsquawk