[MARKET ANALYSIS] European bourses higher across the board; HSBA LN beats in Q2, raises savings target; BAYN GY tops Q2 expectations, cuts debt forecast
- European bourses continue to climb, with the FTSE MIB the outperformer. Not much in terms of a broader driver; plenty of corporate earnings were on the docket this morning, while another day of no strikes between the US and Iran brightens hopes of a sustained end to the conflict.
- Sectors are mixed. Basic Resources top the sector pile, followed by Tech and Industrial Goods & Services. Retail is the sector laggard, with Travel & Leisure and Consumer Products & Services rounding out the underperformers. Weighing on Retail is the earnings from Zalando (-15.5%), in which Q2 revenue missed estimates and narrowed its FY26 adj. EBIT guidance.
- Other key earnings include: Bayer (+3.4%), Q2 revenue and Adj. EBITDA beat estimates and confirms FY26 view; Continental (-1.5%), FY26 revenue guidance missed estimates and highlighted that raw material costs are set to substantially increase; Lufthansa (-9.5%), cuts FY26 adj. EBIT guidance and notes heightened levels of forecasting uncertainty; HSBC (-1.0%), Q2 PBT and Net beat estimates and announces a USD 1bln share buyback programme; BP (+1.0%), Q2 revenue beat and announces its intention to sell Archaea.
- US equity futures are slightly firmer, with the tech-heavy NQ outperforming. After-hours, Palantir reported better-than-expected Q2 metrics, surging US commercial demand, and a raised FY outlook, resulting in shares up over 16% pre-market. For Onsemi, shares are also higher by some 7% pre-market after earnings and revenue topped expectations, and it raised its outlook for AI data centre sales.
Session wraps of this kind, where index-level gains rest on a broad earnings docket rather than a single macro driver, historically disperse rather than trend: the index masks wide single-name dispersion, and the sector leaderboard (Basic Resources and Tech leading, Retail and Travel lagging) tends to be a purer read of the tape than the headline bourses. The earnings pattern here is the familiar one in mid-cycle reporting seasons: beats paired with raised guidance or buybacks (HSBC's capital return, Palantir's raised outlook) have been rewarded, while cuts framed around cost inflation or forecasting uncertainty (Continental, Lufthansa, Zalando) have drawn outsized single-stock moves, consistent with low positioning tolerance for guidance downgrades. The cross-asset tell in such sessions is whether cyclicals and banks confirm the equity tone via credit spreads and the front end, or whether the move stays equity-only. The reference to a continued absence of US-Iran strikes as a background support fits the established pattern of conflict-deescalation risk premia unwinding gradually through energy and freight rather than in a single session. What follows in the usual sequence is the US cash open testing whether futures firmness survives the handover, with mega-cap tech earnings the typical swing factor.