[MARKET ANALYSIS] Tentative trade across European bourses, Tech outperforms

European bourses are mixed and ultimately trading on either side of the unchanged mark. Tentative action which is encapsulated by the tumultuous geopolitical environment and a number of earnings from within the region.
For the UK specifically, the appointment of ex-defence minister John Healey as Chancellor has taken the limelight; his nod for the Finance role was a surprise. However, he has been viewed as a more market friendly option than some of the other candidates (namely Miliband) – nonetheless, the FTSE 100 remains a touch lower this morning. UK defence stocks have risen this morning, given Healey had previously pushed the UK to up defence spending to around 3% of GDP by 2030 (currently on track for 2.7% by 2030). BAE Systems (+2.9%), Babcock (+5.9%) and Rolls Royce (+1%) all benefit. Elsewhere, the UK jobs saw the unemployment rate remain steady at 4.9%, whilst the Employment Change topped expectations. The wages components were flat/very slightly firmer. Overall, a report which will have little impact on the BoE, ahead of the CPI tomorrow and Flash PMIs on Friday.
European sectors hold a slight negative bias. Tech outperforms followed by Basic Resources, whilst Optimised Personal Care and Media reside at the bottom of the pile. The Tech sector continues to bounce back from recent losses, following a similar theme seen in the APAC session, where the KOSPI gained c. 3.5%.
Key Movers: Novartis (+1.8%) gains after it reported a beat on its Revenue and Core EPS, whilst Op. Income fell from the prior year. The Co. also confirmed its guidance. Lindt (-0.8%) reported a slight miss on its H1 sales figure. Swatch (-2.9%) reported strong revenue, though profit metrics were poor. The Co. noted that “strong acceleration” in May/June, will lead to a significant improvement in profitability in H2’26. Mitie (+40%) soars after it was announced that it will be acquired by OCS for GBP 3.1bln.
US equity futures are firmer across the board, with outperformance in the tech-heavy NQ, following similar outperformance from within the sector in Asia and Europe. On the theme of AI/tech, UBS analysts suggest that continued earnings growth and rapid global AI adoption will keep AI names a dominant theme into H2.
In recent reporting, TSMC is reportedly set to raise prices for both advanced and mature chip production services by up to 10% in 2027, Nikkei reported.