The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0853 GMT - Renault has done "such a great job this year," Citi analysts write. When investor sentiment couldn't be any worse and almost all commentators believe that Renault should fail, it now seems likely that the French company will be one of the few EU automakers that won't cut guidance in 2026 and will report one of the highest group EBIT margins, Citi adds. In an investor call ahead of earnings, Citi says Renault highlighted many of the issues investors are worried about, but reaffirmed its 2026 guidance. "Renault management has clearly done a much better budgeting and execution job than investors expected." Citi lowers its target price on the stock to 35 euros from 38 euros and keeps its buy rating. Shares rise 2.5% to 27.17 euros. (dominic.chopping@wsj.com)
0851 GMT - It could be "extremely difficult" for CXMT to commercialize the new chip structure with reduced cell footprint, Morningstar analyst Jing Jie Yu says. The memory maker unveiled a new structure with around 30% reduced cell area over the weekend, and plans to debut a product with the new structure by the end of 2026. While it's a significant upgrade on paper, it'd be challenging to commercialize given uniformity issues during mass production, he says. However, should CXMT be able to successfully commercialize the structure, it means more bits can be produced per wafer, thereby lowering the cost per bit and improving CXMT's cost structure, he notes. Denser DRAM would also make CXMT's server products more competitive against global players, boosting its position in the AI memory space, he adds. (sherry.qin@wsj.com)
0849 GMT - Oil flows through the Strait of Hormuz remain well below prewar levels, with confirmed volumes averaging 10.5 million barrels a day in the seven days to Oct. 10, about 38% below the prewar baseline of 17.1 million barrels a day, according to Kpler data. Confirmed flows fell to 2 million barrels a day on Oct. 10, from 6.7 million on Oct. 9 and 22.8 million on Oct. 8, underscoring significant daily volatility. The latest figures are preliminary and might be revised higher as additional tanker movements are confirmed, according to the data firm. The data excludes Iranian-origin transits. Increased attacks on tankers and elevated maritime risks continue to disrupt shipping through the key oil-export route, keeping daily Gulf flows volatile, while high freight rates are expected to persist through the fourth quarter, Kpler says. (giulia.petroni@wsj.com)
0816 GMT - Shares of European semiconductor companies start the week mixed following a selloff in South Korean stocks exposed to artificial intelligence. SK Hynix closed 4.5% lower, while Samsung Electronics shed 4.4%. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding and smaller rival ASM International are up 0.5% and 1.2%, respectively. BE Semiconductor Industries, the Dutch supplier of semiconductor assembly equipment, is down 0.1%. German chip maker Infineon Technologies stock loses 1.1%. STMicroelectronics shares are down 0.4%. Meanwhile, the E-mini Nasdaq 100 futures contract is 0.3% higher, pointing to a positive opening for tech stocks in the U.S. (mauro.orru@wsj.com)
0806 GMT - The impact of the China-EU deal on hybrids will mainly fall on SAIC, BYD and Chery, which account for more than 90% of sales of Chinese hybrid vehicles in the EU, say Jefferies analysts in a note. Chinese automakers may opt to prioritize higher-priced models, which could lead to stiffer competition with premium German brands, they add. BYD is well positioned through its Hungary plant, while Chery is expanding local production in Spain. XPeng and NIO are more exposed to trade restrictions on fully electric cars, they add. European automakers could face renewed competitive pressure following the new trade agreement, Jefferies says. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0754 GMT - Ahold Delhaize investors might be reminded of the 2025 cyber incident at Marks & Spencer, which caused disruption to its grocery and clothing businesses, Bernstein analysts write after the Dutch grocer said it was experiencing a security issue within its network but stores were open and serving customers. It added that the company was taking steps to assess and mitigate the issue, including taking some systems offline to help protect them. "The extent of disruption and its duration will determine its impact, while any data breaches may open the risk to fines," Bernstein said. It has a market-perform rating on the stock and 38 euro target price. Shares are down 1.1% at 31.93 euros and 8.4% lower over the year-to-date. (ian.walker@wsj.com)
0749 GMT - Malaysia's 2027 budget looks neutral to mildly positive for equities, CIMB Securities analyst Ivy Ng Lee Fang says in a note. Tax relief and targeted assistance are expected to support consumer stocks such as 99 Speed Mart, Eco-Shop Marketing, Mr. D.I.Y. Group and QL Resources. Meanwhile, continued infrastructure spending should benefit construction companies like Gamuda and Malayan Cement. Housing incentives and Johor connectivity improvements should benefit UEM Sunrise and Eco World Development, she adds. However, Ng says the 17.6% minimum wage increase to 2,000 ringgit a month from June 2027 could pressure profit margins at labor-intensive businesses, though the impact on overall benchmark earnings is expected to be limited in 2027. (yingxian.wong@wsj.com)
0723 GMT - The near-term impact of the EU's deal with China to halve the latter's exports of hybrids to the EU for the next four years is modestly negative but manageable, say Bernstein analysts in a note. In the longer term, the impact should be largely neutral as major Chinese automakers are already localizing production in Europe, with BYD set to start production in Hungary by end-2026. Leapmotor is leveraging Stellantis's manufacturing footprint in Spain, and Geely is targeting production at Ford's Spain plant from 2028, Bernstein adds. It doesn't expect the measures to materially derail market-share gains by Chinese automakers beyond an initial adjustment period, similar to EU tariffs on full EVs. The key question is whether automakers can preserve unit economics as production localizes, Bernstein says. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0717 GMT - European markets started the week in the green, led by the financial and utilities sectors. The Europe-wide Stoxx 600 index was up 0.4% having closed the previous week higher and with Friday marking its largest one-day gain since Sept. 21. Germany's DAX was up 0.4%, led by Commerzbank and Deutsche bank, which were up 1.6% and 1.4% respectively. London's FTSE 100 index was up 0.6%, also boosted by banks with HSBC, Barclays and Lloyds up 2%, 1.55% and 1.5% respectively. France's CAC 40 was up 0.45%. (ian.walker@wsj.com)
0704 GMT - Avenue Supermarts' revenue is likely still resilient, Axis Securities analysts say in a research report. Its revenue increased 17.8% on year in 2Q FY 2027, driven by higher like-for-like growth and store additions, the analysts note. Also, the Indian company's FY 2027 focus remains on improving store productivity and driving earnings recovery, while strengthening its presence in key metropolitan markets and exiting seven low-contributing cities. However, the brokerage cuts its FY 2027-2028 earnings estimates for the supermarket chain operator by 1%-12% to factor in macroeconomic uncertainties. It lowers the stock's target price to 4,210.00 rupees from 4,845.00 rupees, with unchanged buy rating. Shares are 4.2% lower at 3,372.10 rupees. (ronnie.harui@wsj.com)
0652 GMT - The recent sell-off in shares of U.K. banks can't be justified ahead of third-quarter results which should be solid, Keefe, Bruyette & Woods's Edward Firth and Fatima Ghaznavi write. This month's results for U.K. banks are unlikely to be the main driver of share-price performance, with most focus on the U.K. government budget on 28 October. KBW expects the bank surcharge to be returned to 8%, from 3%, which will reduce U.K. earnings by around 6%. "However, with UK incumbents trading at a 15%-20% discount to European peers, we expect to see the final arrival of the tax as a positive clearing event removing an area of uncertainty that has dogged the banks for over two years," the analysts add. (michael.hennessey@wsj.com)
0641 GMT - Artificial intelligence stocks--accounting for up to half of Asian indexes--could drive up to 70% of the region's earnings growth in 2027, JPMorgan analysts say. Asia's AI exposure is concentrated in hardware, where tight supply is expected to persist through at least 2028, they say in a note. This should give companies significant pricing power. The biggest shortages are expected in advanced logic chips, chip packaging, semiconductor equipment, Ajinomoto Build-up Film substrates, high-end copper-clad laminate materials, high-bandwidth memory, and high-speed optical components, they add. JPMorgan forecasts net income across the AI ecosystem to exceed $1 trillion by 2028 and free cash flow to reach $700 billion. JPMorgan maintains its overweight recommendations on tech stocks, Taiwan and South Korea.
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