EUROPEAN EQUITY UPDATE: Downbeat trade overall but some upside seen on source reports that China is open to talks, albeit with conditions

STOXX 600: -0.7%

• European bourses opened on the backfoot, continuing the mostly subdued APAC session. A quiet significant pick-up off lows was seen following a Bloomberg report which noted that China is open to talks if US President Trump shows respect – nonetheless, indices still reside in the red.


• Sentiment today has been hit due to several factors; 1) US President Trump ordering investigations into critical minerals, 2) NVIDIA expecting USD 5.5bln hit amid US export controls, 3) poor ASML results. Positive developments regarding trade deal proposals have failed to lift sentiment – the White House Press Secretary said over 15 deals are actively being considered, and believes some could be announced very soon.


• The EZ docket today has Final Italian CPI (revised a touch lower) and Final EZ HICP (unrevised). Docket ahead is quiet, as focus now turns to the ECB on Thursday.

Sectors: Negative

• European sectors hold a defensive bias, in-fitting with the risk tone.


• Tech is by far the clear underperformer, with downside today driven by post-earning losses in ASML (see AEX section) and NVIDIA export control updates. Autos & Parts and Basic Resources are also on the backfoot given the risk tone.


• Elsewhere, its bottoms-up for Heineken, after it posted a strong first quarter – which is helping to boost Food Beverage and Tobacco.

Others: FTSE 100 -0.6%, AEX -1%, CAC 40 -0.8%,

• The FTSE 100 is on the backfoot, in-fitting with the broader risk tone. Beginning with UK data, the region posted a cooler than expected inflation report – this helped to nudge up the odds of a 25bps cut in May. As for stock specifics; Rio Tinto (-1.9%) and Antofagasta (-2.4%) both move lower after providing production updates; the former posted its lowest iron ore output since 2019; the latter saw its copper production rise by 20%. Ultimately, mining names have been swept away by the broader risk-tone and aforementioned US investigation into critical minerals. Bunzl (-23%) is by far the clear underperformer today – the packaging Co. cut its 2025 outlook and paused its share buyback.


• The AEX is the clear underperformer today, with heavy-weight ASML (-6.5%) the culprit after its Q1 results. The Co. reported a mixed set of results; the positives included a beat on its Net Income, raising dividend by 4.9% and constructive commentary surrounding demand for chips; the CEO said “AI continues to be a primary growth driver for the industry. Demand is strong”. The negatives included, a slight miss on Revenue, very poor Bookings and the Q2 Gross Margin outlook a little short of analyst expectations. Elsewhere, Heineken (+2.9%) tops the index after a Q1 beat.

US Equity Futures: ES -0.7%, NQ -1.3%, RTY -0.4%

• Futures are entirely in the red, following the negative risk tone seen in European trade; the NQ underperforms, following the latest NVIDIA updates. As mentioned above, US futures caught a bid on those Bloomberg reports which suggested China is open to talks if US President Trump shows respect.


• NVIDIA shares are lower by around 6% in pre-market trade following an announcement that it expects Q1 FY26 charges of up to USD 5.5bln related to H20 products, following new indefinite US export restrictions to China and D:5 countries. The US now requires licences for products meeting H20 performance levels due to supercomputing risks, affecting inventory, purchase commitments, and related reserves, it said.


• US retail sales are seen rising 1.3% M/M (prev. 0.2%), with the core rate printing +0.3% M/M (prev. 0.3%), and the Control Group +0.6% M/M (prev. +1.0%) (primer below). US industrial output and manufacturing production data for March are seen at -0.2% M/M and +0.3% M/M respectively, while capacity utilisation is seen falling. Fed Chair Powell is also due.

16 Apr 2025 - 10:10- EquitiesData- Source: Newsquawk