[MARKET ANALYSIS] European equities start the last day of Q2 entirely in the green

European bourses (STOXX 600 +0.6%) begin the last day of Q2 entirely in the green, with outperformance in the DAX 40 (+0.9%) and AEX (+0.5%). Many indices are set to have their biggest quarterly gain since the end of 2022, with the STOXX 600 just shy of 10% gains for Q2. Focusing on Germany's DAX, analysts see possible continued underperformance, with any flare-up in EU-China tensions posing a further headwind. Its auto sector has been particularly affected in recent months, with China playing a key role in that narrative.
Sectors highlight the positive bias. Basic Resources (+2.1%), Technology (+1.3%) and Industrial Goods & Services (+1.4%) are the outperformers, while Consumer Products & Services (-0.7%), Food, Beverages & Tobacco (-0.6%) and Autos (-0.6%) are the only sectors printing modest losses.
A lot of pharma updates this morning: Abivax (+25.5%), its experimental UC drug helped harder-to-treat groups of patients achieve remission; Sanofi (+0.2%), its Nexviazyme met all primary and secondary endpoints in infantile-onset Pompe disease phase 3 study; Genmab (+7.6%), its phase 3 study for epcoritamab + lenalidomide met its primary objective.
Other key stories today: Maersk (-0.6%), despite raising its FY EBITDA guidance citing strong Asia demand; Sainburys (+2.1%), backed its FY guidance after reporting Q1 sales growth of 3.1%; easyJet (-0.8%), downgraded by RBC, Citi and UBS, with UBS citing uncertainty around a solid offer from Castlelake.
US equity futures are also firmer across the board, with the NQ's Q2 gains in excess of 24%. The tech/AI story has been the key part of the move higher in recent months and is set to remain a key fundamental driver in the coming months.