[MARKET ANALYSIS] European bourses rebound following 5 days of selling; BMPS IM offers to buy BAMI IM and BGN IM
- European bourses begins the final trading session of the week with broad gains, with the blue chip EuroStoxx 50 set to break its 5-day losing streak. Volumes remain light as the Summer season continues. On the data front, despite mixed French and German PMIs, the EZ figure printed stronger-than-expected across the board, with clear strength in the manufacturing sector. Commentary by S&P highlighted the effect of the heatwave on the services sector. For the ECB, S&P stated that the hawkish bias should remain giving the solid Q3 GDP growth, renewed hiring and elevated inflation.
- Sectors highlight the positive bias, with all but 2 (Health Care, Media) in the green. Basic Resources is the clear outperformer, given the resurgence of precious metals (spot gold +1.4%). Banks and Autos round out the outperformers.
- Focus this morning has been on the Italian banking M&A front. BMPS announced a combined EUR 34bln all-cash offer to buy Banco BPM and Banca Generali, in an attempt to fight off a takeover by Intesa Sanpaolo. If successful, this would make BMPS Italy's third biggest bank by market cap, overtaking Credit Agricole. Commenting on the offers, BMPS CEO said the two deals are not conditional on each other and can succeed independently, though believes they will both be successful. In terms of market reaction, despite pre-market indicating large moves in either direction, BMPS now trades with gains of 0.9%, while Banco BPM and Banca Generali trades lower by 0.4% and 1.8% respectively.
- In other news: Bavarian Nordic (+8.9%), Q2 revenue beat and raised its FY26 guidance; Nibe (+7.6%), Q2 metrics grew Y/Y and highlighted optimision about its 2026 performance; Adidas (+1.3%), initiated with buy at JPMorgan; Renault (-1.0%), downgraded to equal weight at Barclays.
- US equity futures are firmer across the board. Overnight, Nvidia denied a report by The Information that it plans to ship a China-specific language processing unit by year-end, stating it has no LPU sales in China and no China-specific LPU product on its roadmap while Bloomberg reported earlier that the Co. is in prelim. talks with a South Korean chip designer over a partnership. For Broadcom, the Co. is in talks with lenders to raise over USD 60bln in senior secured debt for an AI chip financing deal.
The session mixes a routine relief bounce after a five-day slide with one piece of hard news: BMPS's combined all-cash bid for Banco BPM and Banca Generali, framed explicitly as a defensive manoeuvre against Intesa Sanpaolo's advance. Italian banking consolidation has a long, stop-start history in which state-linked or politically sensitive bidders have launched pre-emptive combinations to block rivals, and the pattern has tended to be a prolonged contest: bid defence, antitrust and political scrutiny, then either a sweetened rival offer or a negotiated carve-up. The immediate market read, acquirer flat-to-higher and targets lower, fits the established signature of a cash-and-share deal where the exchange terms disappoint holders of the targets relative to pre-market speculation, and where the bidder's share reaction reflects scepticism about integration and funding rather than the strategic logic. The CEO's insistence that the two offers are not interconditional is itself a tell: it pre-positions the bank for a partial outcome, which in comparable episodes is how contested deals of this kind have ended. On the macro side, a strong eurozone PMI composite with manufacturing strength keeps the ECB hawkish bias in place, which matters for the banking sector's rate sensitivity and for the relative bid in banks and autos seen in the sector tape. Worth watching are the regulatory and political response in Rome, any Intesa counter, and the financing structure for the BMPS offer, alongside the Broadcom debt raise as a gauge of credit appetite for AI-linked issuance.