[MARKET ANALYSIS] Global equities under pressure, initially driven by China's US probe and then further energy upside

European bourses (STOXX 600 -0.9%) start Friday's session entirely in the red, reversing the modest pre-cash gains. This comes following China's MOFCOM launching new US probes (see more below). The DAX is the underperformer, while the FTSE 100 despite being lower is the relative outperformer, benefiting from gains in AstraZeneca, after its tozorakimab drug met its primary endpoints in two phase 3 trials for patients with COPD.
Sectors are mainly in the red. Media and Retail sit at the bottom of the pile, while Health Care posts modest gains as Astra supports the sector.
Italian banks have been in focus after multiple broker updates by Goldman Sachs. Monte dei Paschi was initiated with a buy rating as analysts see synergy benefits following the acquisition of Mediobanca. BPER Banca was initiated with neutral, while Banco BPM was downgraded to neutral from buy due to it being less attractive than several peers on a number of metrics.
Key movers include Pernod Ricard, Novartis and Santander. For Pernod Ricard, the Co. confirmed it is in discussions regarding a potential business combination with Brown-Forman. For the Swiss pharmaceutical company, they have reached an agreement to acquire Excellergy for up to USD 2bln. Finally, for Santander, the bank reaffirmed its 2026-28 targets and said profit is on track to be higher than 2025.
US equity futures have reversed earlier gains, pressured by the announcement from China's MOFCOM and then followed up by the continued upside in energy prices. China's Commerce Ministry stated that it has initiated two trade barrier investigations into US practices, due to evidence that restrictions on trade, tech exports and investment are disrupting global industrial and supply chains. This comes ahead of a Trump-Xi meeting, which is now expected in May.