Tech and Industrial Stocks Weigh on the European Session

Most European stock market indices are down, and the gains seen so far – driven by a very successful earnings season – are losing momentum amid mounting geopolitical concerns. Major benchmarks such as the Stoxx 600, the DAX and the FTSE 100 are falling slightly in value, driven by rising bond yields and low summer liquidity in the market, which is exacerbating volatility. The main factor driving market sentiment was the US Treasury’s unexpected decision to double its purchases of long-term bonds. Although this move initially pushed down yields on the bond market, investors’ concerns about persistent inflation and rising global debt quickly reignited jitters, offsetting the initial relief. Meanwhile, oil prices are rising sharply – the price of Brent crude has exceeded US$94 per barrel, reaching a three-week high amid concerns over supply disruptions in the Middle East and US warnings to countries supporting Iran. The US dollar, in turn, weakened noticeably, with its index (USDIDX) falling to around 98.54 – its lowest level in several months – in a market reaction to government interventions aimed at stabilising the US bond market.

Turning to the situation on the stock market itself, the energy sector is performing best, along with healthcare and essential goods, which are directly benefiting from the relocation to safer assets and rising oil prices. By far the worst-performing sectors, however, are the technology and industrial sectors, which are exerting the strongest downward pressure on the Euro Stoxx 50 index. Company information:

Current volatility for selected companies from the Euro Stoxx 50 index, representing the most volatile stocks at present. Source: XTB

• Shares in JD Sports Fashion Plc plummeted by nearly 15–16 per cent, in a direct reaction to the company’s downward revision of its profit forecasts due to very weak sales of sports footwear in North America and consumers cutting back on spending.
• German laboratory equipment manufacturer Sartorius recorded strong growth of almost 6 per cent, recouping this year’s losses, thanks to UBS analysts upgrading their recommendation to ‘buy’, having identified significant growth potential for the company for the period 2027–2029.
• The board of the Italian bank Monte dei Paschi di Siena is discussing a strategy to fend off a massive €36 billion takeover bid from its rival Intesa Sanpaolo, and is reportedly considering using its stake in the insurer Generali to repel the bid.
• Among the top gainers on the Euro Stoxx 50 index are energy giants such as Eni (+1.2 per cent) and TotalEnergies (+0.8 per cent), whose share prices are being driven by the ongoing rally in the commodities markets.

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