The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0915 GMT - European stocks will be able to withstand heightened bond volatility as revenues on the continent improve, UBS Wealth Management's Mark Haefele says. Eurozone government bond yields have risen sharply in recent days amid higher oil prices and concerns around France's budget deficit. However, improving revenues, structural investment demand and resilient earnings growth will all support the continent's stocks. An uptick in manufacturing activity on the continent will drive revenue growth, in turn boosting earnings, Haefele says. "Improving profit momentum should help cushion the effect of moderately higher yields on equity valuations." The Europe-wide Stoxx 600 falls 0.85%, down 3% over the last month. (josephmichael.stonor@wsj.com)
0854 GMT - Hong Kong equities are likely to be weighed by factors such as markets pricing in further Federal Reserve rate hikes and tighter cross-border controls, says HSBC Global Investment Research in a note. These may keep sentiment subdued toward Hong Kong's financial- and property-heavy index, HSBC analysts say. Mainland China measures to restrict cross-border wealth flows are a headwind, while tighter cross-border capital-flow rules have weakened sentiment toward Hong Kong property developers, they say. Market liquidity has softened as southbound flows from mainland China have fallen significantly compared with 2024 and 2025. HSBC downgrades its rating on Hong Kong to neutral from overweight. It cuts its Hang Seng Index year-end target to 25500 from 27000. The index closed 1.4% lower at 23785.79. (megan.cheah@wsj.com)
0850 GMT - Taiwan equities offer attractive defensive characteristics during periods of uncertainty, say HSBC Global Investment Research analysts, noting solid growth prospects and strong corporate fundamentals. Taiwanese stocks appear less volatile than fellow artificial-intelligence-heavy peer South Korea, as it has a more diverse selection of AI-related equities, they say in a note. "Taiwan continues to benefit from the AI investment cycle, and we expect this performance momentum could remain strong," HSBC says. The bank upgrades its rating on Taiwan equities to overweight from neutral. It raises its year-end target on the benchmark Taiex to 52000 from 49000. The Taiex closed 1.0% lower at 49313.44. (megan.cheah@wsj.com)
0849 GMT - Mercedes-Benz is making strong progress to outline the necessary restructuring measures for 2026 and 2027, in J.P. Morgan's view. The bank expects these measures to be defined by the end of 2026, setting the earnings base and strategic direction for the company to stabilize earnings in 2027. A key earnings driver in China will be the work Mercedes is doing to cut material costs in order to improve profitability of the recent launches in the region, particularly in the light of the competitive pricing environment, it adds. "Strategically, in our view, the firm will continue to address earnings momentum year by year, focusing on the short term and free cash flow generation, which will ultimately dictate shareholder return." Shares fall 0.9%. (dominic.chopping@wsj.com)
0849 GMT - Asian equities are likely to perform well despite the likelihood of more Federal Reserve rate hikes, say HSBC Global Investment Research analysts in a note, citing past rate-hike cycles where the region's stocks delivered average gains of around 15%. Asian equities tend to de-risk in anticipation of tightening, but once the hiking path becomes clearer, equities typically stabilize, they say. Money markets are currently pricing in three rate hikes, compared with HSBC's expectation of just one, the analysts note. Any recalibration toward HSBC's single-hike view could provide further support for Asian equities. Regional valuations remain attractive, as forward price-to-earnings ratio valuations are down to 10X from 14X this year, they add. (megan.cheah@wsj.com)
0847 GMT - Tesco's first-half results materialized as they should, with profit growth and margin expansion in the first half, analysts at J.P. Morgan say in a note. The grocer achieved expectations, as well as slightly increased its profit outlook, the analysts write. The read-across is positive to peer Sainsbury's. Shares are up 3.55% at 492.70 pence. (aimee.look@wsj.com)
0840 GMT - London Stock Exchange Group investors will likely want to see the exchange owner monetizing increased artificial-intelligence adoption by clients, UBS analysts write. They add that expectations on this front are low in the near-term given management's commentary at the first half-year earnings. "We expect LSEG will remain a 'Show Me' story with investors which means its share price will likely reflect a material AI discount in the near-term," the analysts say. UBS has a buy rating on the stock and 117.00 pound target price. Shares are up 2.2% at 84.96 pounds, but 5.1% lower over the year to date. (ian.walker@wsj.com)
0823 GMT - BOC Hong Kong's net interest income growth for 3Qis likely to be modest, buoyed by solid balance-sheet growth, says Citi analyst Michael Zhang in a note. He projects the lender's 3Q adjusted net interest income to have expanded 1% on quarter to 15.1 billion Hong Kong dollars. However, BOC Hong Kong's net interest margin may have narrowed by 2 bps on quarter, due to higher funding costs amid intensifying deposit competition before rate hikes. Its net interest margin could recover after 3Q as assets reprice at higher rates, he adds. Meanwhile, fee income growth could have weakened in 3Q amid softer market sentiment in Hong Kong, he adds. Citi raises its target price to HK$57.90 from HK$56.50 and maintains a buy rating. Shares closed 4.75% lower at HK$48.48. (megan.cheah@wsj.com)
0814 GMT - Shares of European semiconductor companies are in negative territory as investors sell off tech stocks with exposure to artificial intelligence. In Asia, South Korea's SK Hynix and Samsung Electronics closed 2.4% lower. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding and smaller rival ASM International are down 1.1%. BE Semiconductor Industries, the Dutch supplier of semiconductor assembly equipment, is down 0.5%. German chip maker Infineon Technologies stock loses 2.5%. STMicroelectronics shares are down 3.3%. Meanwhile, the E-mini Nasdaq 100 futures contract is 0.5% lower, pointing to a weak opening for tech stocks in the U.S. (mauro.orru@wsj.com)
0810 GMT - The Dutch government's complete exit from its stake in ABN Amro Bank is drawing closer, Citi's Shrey Srivastava writes. The government said Wednesday that it plans to lower its stake to 10.5% from 20.7%. Historically, investors have viewed a Dutch government exit as a positive, Citi says, as well as a catalyst for possible acquisitions. Any deals by ABN Amro are likely to be small-scale and could be focused around private or corporate banking, the analyst adds. The bank remains one of Citi's top picks in European banking. Shares are down 1.2%. (michael.hennessey@wsj.com)
0759 GMT - The Federal Reserve signaling a potential second interest-rate increase this year remains a major overhang for the Asian real-estate investment trust sector, say DBS Group Research analysts in a note. The first rate hike by the U.S. central bank in over three years last month has placed REITs under pressure. Rising bond yields, higher funding costs for REITs and a hawkish Fed outlook reduces the appeal of REIT distribution yields against risk-free alternatives, they say. However, the sector's fundamentals remain resilient, DBS adds. More defensive REIT subsectors such as healthcare could outperform peers, while industrial REITs with large non-Asian exposure could be subject to more volatility in financing costs and foreign-exchange movements. (megan.cheah@wsj.com)
0757 GMT - European natural-gas prices climb back above 80 euros a megawatt-hour as concerns over continued attacks on shipping in the Gulf raised fresh questions about the security of LNG supplies. According to a Bloomberg report, Qatar had assembled a fleet of at least 12 empty LNG tankers in the Persian Gulf, suggesting it was preparing to resume or increase shipments. However, intensifying attacks on vessels in the region have heightened concerns over the safety of transits. In early trading, the benchmark Dutch TTF contract rose 3.2% to 80.59 euros a megawatt-hour. Meanwhile, European Union underground natural-gas storage facilities are currently 72% full, according to data from industry group Gas Infrastructure Europe, well below the seasonal average.
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