EUROPEAN EQUITY UPDATE: Stocks firmer amid tailwinds from Asia, although dissapointing Chinese PMIs overnight hits the Basic Resources sector

STOXX 600: +0.4%

• European equities have opened mostly higher, following a tailwind from Asia, where APAC stocks closed mostly firmer. Other newsflow includes Nexperia China saying its production lines are supported by enough in-house inventory, as well as the Dutch government saying that China talks continue in a constructive way forward, boosting sentiment among European car makers. The DAX has been the outperforming index amongst European equities due to gains in its heavyweight Auto sector.


• In terms of PMI data today, Spain and Italy topped expectations whilst France was revised higher, and Germany and the EZ were unrevised. CAC40 (+0.3%), which opened initially negative/flat has gained an uptick since the data was published.


• Looking ahead, ECB’s Lane is set to speak and the UK GBP 550mln BoE Long-term Gilt sale.

Sectors: Mixed/Positive

• European sectors have opened mixed/positive this morning. At the top - Automobiles & Parts (+2.0%), Banks (+1.0%) and Energy (+0.9%). Automobiles are the clear winner this morning due to the aforementioned constructive newsflow from Nexperia.


• Energy has been given a boost by rising crude prices following the OPEC+ announcement to raise oil output by 137k BPD in 2025 whilst pausing for Q1’26. Further for oil, geopolitical newsflow includes: Israeli PM Netanyahu suggesting he’s prepared to take further actions against Iran's allied groups, and Trump’s recent threats to Nigeria to send troops or airstrikes to Nigeria.


• At the bottom - Basic Resources (-0.9%), Real Estate (-0.5%) and Media (-0.3%). For Basic Resources, disappointing Chinese PMI data overnight has weighed on base metals and impacted basic resources firms such as Anglo American (-1.5%) and Rio Tinto (-2.1%), thus pulling down the sector. Elsewhere in Newsflow has been light for Real Estate and Media to determine the downward pull in their share prices, although FT reported UK Chancellor Reeves is reportedly considering higher bands of council tax to target expensive homes.

Movers:

• BP (+0.4%) Shares are up, lifting the energy sector after Co. unlocks value and divests non-controlling interests in US onshore midstream assets for USD 1.5bln; BP target of USD 20bln of divestments by the end of 2027 Co. divests non-controlling interests in Permian and Eagle Ford midstream assets to private investor Sixth Street.


• Renault (+3.2%) - Sentiment has been higher after Co.’s Brazil unit sold 26.4% stake to Geely to strengthen the strategic cooperation to launch new zero and low-emission vehicles, further driving gains for the Auto sector.


• Vodafone (-2.1%) downgraded to Sell from Neutral at UBS.


• Orange (+2.0%) - Orange has reached a non-binding agreement with Lorca to acquire full ownership of MasOrange through the acquisition of the remaining 50% stake in its Spanish joint venture for a price of EUR 4.25bln in cash. This has increased sentiment in Orange stock, lifting the telecommunications sector.

US Equity Futures:

• US equities are indicative of a firmer opening. Upside can be seen in ES (+0.3%), NQ (+0.5%), YM (+0.1%) and RTY (+0.1%). Newsflow includes Trump saying the US will not allow China to have NVIDIA’s chip. Berkshire Hathaway also released their Q3 earnings, with operating earnings exceeding expectations, increasing sentiment for ES.


• Looking ahead in the US, traders look ahead to US S&P Global Manufacturing PMI Final (Oct), US ISM Manufacturing, US Financing Estimates and the Canadian S&P Global Manufacturing PMI (Oct). Speakers include Fed’s Daly and Cook, BoC’s Governor Macklem is also set to speak later.

03 Nov 2025 - 10:00- EnergyGeopolitical- Source: Newsquawk