EUROPEAN EQUITIES UPDATE: Stocks modestly lower across the board, Defence names benefit from Trump

STOXX 600: -0.3%

• European bourses began the session around the unchanged mark, but slipped into negative territory, soon after the cash open, but without a clear catalyst - perhaps some focus on the latest hawkish geopolitical rhetoric from Trump. More recently, the complex has picked up from worst levels to currently trade towards the mid-point of the day’s range.


• Newsflow this morning has been relatively quiet aside from the German Ifo survey; metrics were softer-than-expected across the board, with both Current Conditions and Expectations both below the most pessimistic of analyst expectations. Indices were already moving higher into the release, but ultimately had no impact on price action.


• Focus has also been on geopolitics, with US President Trump surprising markets (and Zelenskiy) with commentary which noted that Kyiv could win back “all of Ukraine” with the help of Europe. This marks a shift to Trump’s previous commentary, which involved swapping of territories with Russia. Today, the Kremlin responded by saying Russia continues to advance in Ukraine, but praised Trump’s efforts to bring an end to the conflict.


• European docket for the remainder of the day is quiet; focus really only on BoE’s Greene after the cash close.

Sectors: Negative

• European sectors hold a negative bias, and with the breadth of the market fairly narrow today.


• Utilities is found towards the top of the pile, albeit only marginally so. Iberdrola (+0.8%) announced it will be investing USD 68bln to grow in the UK/US; the Co. also said it sees close to EUR 20bln in dividends between 2025 and 2028.


• Tech and Industrials complete the top three. The latter is seemingly buoyed by upside across defence names, as the complex digests the aforementioned hawkish remarks from US President Trump in the prior session.


• Financial Services is found right at the foot of the pile, joined closely by Autos and Consumer Products. Nothing is really driving the downside for Financial Services, whilst Autos/Consumers are seemingly pressured by the broader risk tone. Also adding to the downside for autos is pressure in Porsche AG (-0.9%) after receiving a downgrade at Bankhaus Metzler.

Movers:

• JD Sports +1.2%; In-line revenue whilst missing on profit; expects limited impact from US tariffs, remains cautious on trading environment for H2.


• Saga +5%; H1’25 results better than priors; notes, H2 forward bookings are strong.


• Lufthansa -0.3%; CEO warned of flight closures in Germany if the government does not provide relief on pricing; Chancellor Merz said Germany's aviation costs need to be lowered.


• Sanofi +0.5%; Sanofi commits to an additional USD 625mln to Sanofi ventures.


• Swiss Re -1.2%; downgraded to Neutral from Overweight at JPMorgan.

US Equity Futures: ES +0.1%, NQ +0.2%, RTY U/C

• Futures are modestly firmer/flat, with the ES/NQ trading with incremental gains whilst the RTY bobbles around the unchanged mark.


• Pre-market movers; Micron (+1.9%, Q4 results topped expectations and guidance was decent), Alibaba (+9%, launched its largest AI model; collaborates with NVIDIA on Physical AI), NVIDIA (+0.8%, insider selling; OpenAI in talks to rent NVIDIA chips).


• Docket is fairly quiet. The US data slate features weekly MBA mortgage applications data, New Home Sales for August (exp. 560k from 652k) and building permit revisions. Fed’s Daly is also due to speak later.

24 Sep 2025 - 10:20- ForexEU Research- Source: Newsquawk