[MARKET ANALYSIS] Choppy trade in stocks; Banking sector outperform on the back of HSBC

European equities now trade with a slightly positive bias despite a choppy morning. One of the macro themes this morning is the previously telegraphed trade agreement between the EU and India, which will see both sides cut tariffs to ease trade restrictions. However, the news has failed to provide a sustained boost to equities, with trade still choppy and price action fluctuating. Ahead is earning from the luxury giant LVMH.
European sectors are mixed, with a slight bias to the downside. The clear outperformer so far is the Banking sector (+1.2%), supported by gains in HSBC (+2.5%) after the bank announced it will close a retail branch at Raffles Place in Singapore and replace it with a wealth centre, reinforcing its focus on affluent clients. Insurance (+0.8%) and Construction (+0.6%) are also modestly higher, although there has been little to explain the moves. At the bottom of the pile, Basic Resources (-1.2%), Chemicals (-0.9%) and Autos (-0.7%) are lagging. The Basic Resources sector has been pressured by weaker base metal prices and likely profit-taking and renewed Trump tariff rhetoric (on South Korea this time) following yesterday’s gains. Newsflow has otherwise been light across the remaining lagging sectors.
Movers this morning include Puma (+3.0%), with its shares rising, though off its peak of +20% after ANTA Sports is set to acquire a 29% stake in the Co. On the downside, Alstom (-3.2%) is lower following a broker downgrade
US equity futures are mostly firmer, with gains in the ES (+0.2%), NQ (+0.6%) and RTY (+0.4%), while the YM (-0.1%) is the notable underperformer. There is little in the way of stock-specific or fresh macro catalysts to explain the positive tone. Looking ahead, markets are awaiting earnings from Texas Instruments, UnitedHealth, Boeing, RTX and American Airlines.