EUROPEAN EQUITY UPDATE: Stocks mixed with healthcare names outpacing peers amid Trump pharma announcement

STOXX 600 +0.4%, EUROSTOXX 50 +0.1%, DAX 40 +0.2%, CAC 40 +0.2%, FTSE 100 +0.7%, FTSE MIB -0.2%, IBEX 35 -0.4%, SMI +1.4%

• European bourses trade with a mostly positive skew after a shaky start to the session. On a national level, the FTSE 100 and SMI are leading on account of the strong performance seen across the health care sector (see section below for details). From a macro perspective in Europe, Eurozone inflation printed in-line with expectations and is not expected to see the ECB deviate from its current on-hold policy stance. Greater attention is on the US government shutdown and the potential macro implications (see the US section for details).

Sectors: Mixed

• Sectors hold a mixed picture. Health Care names are the clear outperformer across the region with the sector boosted in the wake of Pfizer's drug pricing deal with the US. The deal is being viewed as removing some of the current uncertainty facing European pharma names. The sector is also being supported by gains in Novartis (+2.2%) after the Co. received FDA approval for Rhapsido. Other gainers include Media and Energy with the latter attempting to atone for recent crude-inspired losses. To the downside, Tech names are lagging with the likes of SAP (-1.2%) and Infineon underperforming and acting as a drag on the DAX. Other laggards include Travel & Leisure and Industrial Goods & Services as Rheinmetall (-2.3%) drags the sector lower.

Individuals

• Greggs (+7.9%) shares are on a roll following its Q3 update, which saw the Co. maintain FY expectations.


• Carlsberg (+2.7%) shares have shrugged off comments from its CEO that the Co. will not achieve 4-6% top line growth this year with some focusing on expected increased synergies from its deal with Britvic.


• Puma (+1.2%) and Adidas (+1.1%) shares are higher in sympathy with pre-market gains in Nike.


• Tate & Lyle (-11%) shares are slumping after cutting its profit outlook.


• Sabadell (-1.2%) shares are on the back foot as the Co. continues to advise its shareholders not to accept the BBVA (-3%) bid.


• BNP Paribas (-0.5%) have been weighed on by reporting via Bloomberg that the US is reportedly pushing for a repeal to a Basel rule change that aided the Co.

US Equity Futures: ES -0.6%, NQ -0.7%, RTY -0.7%

• US equity futures are lower across the board after being sold in early European trade as investors reacted to news of the US government shutdown. The market implications are largely centered around the potential economic hit to the US economy and delays to macroeconomic data points. With weekly claims and NFP set to be postponed and CPI also in jeopardy. Such an outcome would mean that FOMC policymakers will have less of a view on the US' economic performance. As such, alternative data points, such as today's ADP report, will take increased importance. Consensus looks for a decline to 50k from 54k. As it stands, markets assign a 95% chance of a rate cut this month and an 80% chance of another in December. Note, ISM manufacturing is also due today.


• In terms of stock-specific updates, Nike (+3.7% pre-market) shares are set to open higher after reporting beats on sales and profits. Occidental Petroleum (+1.3% pre-markets) shares are firmer in pre-market trade following news that Berkshire Hathaway is eyeing the Co.'s petrochemical unit. Elsewhere, the Fed has lowered Morgan Stanley's (+0.5%) stress capital buffer.

01 Oct 2025 - 10:20- EquitiesResearch Sheet- Source: Newsquawk