[MARKET ANALYSIS] European equities mixed as markets digest Trump's 15% blanket tariffs; Defence names hit as Hungary blocks further funding

European bourses (STOXX 600 -0.1%) show a mixed picture following the shifting tariff environment in recent days. The IBEX (+0.8%) and FTSE MIB (+0.7%) outperforms its peers, while AEX (-0.2%) and DAX 40 (-0.3%) lags. German Ifo printed slightly better-than-expected, but failed to reverse any of the earlier losses in the German index.
Sectors are mixed. Banks (+0.8%) and Utilities (+0.6%) gains at the start of the week, aided by multiple broker upgrades for banks while Enel (+5.9%) supports the Utilities sector. The Co. updated in its 2026-28 strategic plan, raising its planned investment to EUR 53bln from EUR 43bln, seeing cuts of up to EUR 700mln by 2028 and approved the execution of a new tranche of its share buyback programme. On the other hand, Technology (-1.1%) and Industrial Goods and Services (-0.6%) underperform. European tech giant ASML (-2.1%) seems to have been hit on OpenAI planning USD 600bln in compute spending by 2030 (prev. cited USD 1.4tln).
European defence names have extended on Friday's downside, after Hungary said it will block any additional funding packages until Russian oil starts flowing through the Druzhba pipeline. Hungary has been hit with an oil shortage in recent days, causing it to release oil from its strategic reserves. The likes of Rheinmetall (-2.0%), Thales (-2.2%) and BAE Systems (-1.3%) have been hit in the wake of this.
Other key movers include Johnson Matthey (-15%) and Pernod Ricard (-3.3%). Johnson Matthey has agreed to sell its Catalyst Technologies business to Honeywell, but at a 26% price cut of GBP 1.32bln. For Pernod Ricard, shares have slumped over the heightened tariff uncertainties. Alcohol and Beverages similarly sold off when tariff uncertainty first arose in early 2025.
US equity futures (ES/NQ/RTY -0.3%) were initially hit at the start of the APAC session, as President Trump raised the tariff rate from 10% to 15%, but have since rebounded slightly as the pre-cash session continues.