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[MARKET ANALYSIS] European bourses build on recent advances; AI/memory sell off continues

Newsquawk Staff ·

  • European equities (STOXX 600 +0.7%) are entirely in the green, continuing to build on the strength seen in the prior session. Gains across major indices vary between 0.2-1.2%; the FTSE MIB lags vs peers, whilst the CAC 40 outperforms. European sectors hold a strong positive bias; Basic Resources benefit from the risk tone, and underlying strength in metals prices whilst Energy lags given the selling in oil prices.
  • Key movers: Evotec (+6.9%, Q3 rev. falls but moves forward with restructuring), ArcelorMittal (+4.9%, tops Q3 estimates), Diageo (+3.0%, organic sales beat and holds guidance), Rheinmetall (-16.3%, cuts 2026 sales outlook and order delays), Deutsche Telekom (-2.1%, decent results and announces share buyback), Commerzbank (-1.9%, rev. missed expectations).
  • Hefty selling across major tech/memory names overnight, saw the KOSPI close with losses in excess of 5%. Heavy constituents such as SK Hynix (-5%) and Samsung (-7.5%) fell, with the pair hit in catch-up play to action seen stateside, amidst growing woes of increased AI regulation following the Democratic sweep; Japan’s Kioxia slumped c. 13%. And whilst the recent sell-off can be attributed to the US midterms, it comes despite a slew of positive demand-related comments from several memory firms; Kioxia recently mentioned that clients are negotiating contracts extending into 2029, whilst Samsung expects tight supply through 2027 and 2028.
  • Speaking on the recent sell-off in the memory market, JPMorgan opined that Q3’26 results have generally been positive (EPS/margin beats). The firm adds that end demand signals remain mixed, but believes that sector-specific supply & demand fundamentals should “continue to be very solid through 2028E”.
  • US equity futures are mixed, with underperformance in the NQ (-0.7%), as the AI/memory sell-off continues into today. In pre-market trade, ARM (-3.3%) slips following weaker than expected royalty revenue. Elsewhere, Qualcomm (-9%) sinks after weaker than expected smartphone chip sales.

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