EUROPEAN EQUITY UPDATE: FTSE 100 outperform European counterparts, Hermes and L’Oreal lower post-earning.

STOXX 600: -0.2%

• European equities have opened largely in the red, but with the FTSE 100 (+0.6%) the only major European index on the front foot, following the UK's softer-than-expected inflation report and gains in mining names.


• For the index, Barclays gains (+3.7%) after the company announced a GBP a 500mln share buyback while raising its 2025 earning guidance. Mining companies have also rallied after Fresnillo reaffirmed its silver production forecast for the full year (and gold and silver prices steadied).


• To the downside, weak earnings from large French companies such as L'Oreal with 2025 Q3 revenue at +4.2% was below exp. +4.9% at EUR 10.33bln and Hermes Q3 revenue at Q3 revenue at 3.88bln below exp. 3.9bln has weighed down the CAC 40 (-0.7%) and Euro Stoxx 50 (-0.4%).


• Looking ahead: Today’s speakers includers ECB President Lagarde, ECB Vice President de Guindos, ECB's Buch (supervisory); Riksbank's Jansson and Riksbank's Thedeen.

Sectors: Negative

• European sectors have opened largely in the red this morning. The biggest winners are Energy (+0.9%), Utilities (0.5%) and Basic Resources (+0.5%). Escalating geopolitical tension in the Russia-Ukraine war after Russia’s overnight attack on Ukraine's Poltava region damaged oil and gas industry facilities, has seen crude gain, thereby driving market sentiment for the Energy sector.


• Basic resources have benefited from rebounding gold and silver prices, increasing sentiment for companies like Fresnillo (+2.5%). Additionally, it’s been reported that Rio Tinto (+2.5%) mulled an asset-for-equity swap with Chinalco, which could free up the company to restart buyback and strategic deals, lifting the Basic Resource sector


• The biggest loser is consumer products and services (-2%). This is largely due to weak earnings from L’Oreal (-5.8%), Hermes (-3.5%) and Adidas (-2.1%) - the former pressured after Q3 revenue was below expectations, dampening sentiment for the Consumer Products and Services sector. Automobiles (-1.5%) and Chemicals (-0.9%) are the other sectors at the bottom, although news flow has been light around those sectors. However, with Auto, sentiment has been pulled back after yesterday’s gains following GM positive earnings.

Movers:

• Thule (+5.3%) - Q3 (SEK): Sales 2.528bln (exp. 2.678bln), EBIT 453mln (exp. 439.5mln). (Thule)


• Softcat (+3.3%) - FY 2025 (GBP): Revenue 1.458bln (prev. 962.6bln Y/Y), expects to deliver low double-digit gross profit growth in FY26. (Softcat).


• Alstom (+1.1) - Co. won EUR 2bln contract with Eurostar for 30 Avelia Horizon high-speed trains. (Alstom)


• Aberdeen Group (-0.4%) - Q3 AUMA GBP 542.4bln, transformation programme remains on track to deliver annualised savings of at least GBP 150mln by year-end, confident in outlook for business. (Aberdeen Group)

US Equity Futures:

• US equity futures are lower with downsides in NQ (-0.1%), Dow (-0.1%) and RTY (-0.1%) whilst the Dow Jones is flat. Market uncertainty persists after Trump said the meeting with Chinese President Xi may not happen.


• Looking ahead: Weekly MBA mortgage applications data and EIA weekly Crude production. Today's speakers' slate includes Fed's Barr, who will speak on financial inclusion, and his remarks are not expected to touch on monetary policy or the economic outlook. Today's corporate reporting docket includes: HLT, TMO, GEV, BSX, T, CME, MCO, APH, KMI, LRCX, IBM, TSLA, URI, ORLY, VRT, AA.

22 Oct 2025 - 10:05- MetalsGeopolitical- Source: Newsquawk