Market wrap 📈 European indices on the rise despite Iran - US tensions

Despite uncertainty surrounding the future of the conflict in the Middle East and Iran’s comments initially rejecting a ceasefire proposal—calling instead for a full end to the conflict and a halt to attacks—European equity indices are moving higher. Germany’s DAX is up 1.5%, with DE40 futures rising above 23,200 points. The UK’s FTSE and France’s CAC 40 are also gaining close to 1.3%, while Poland’s WIG20 is leading the region with gains exceeding 2%.

• UK inflation data came in slightly above expectations, with CPI rising to 3.2% year-on-year versus 3.1% forecast, while producer price indices (PPI) declined more than anticipated. In Germany, the Ifo business climate index surprised to the upside at 86.4 compared to expectations of 86.2, though slightly below the previous reading of 86.7. EUR/USD is slipping to 1.158 today, while the USD index (USDIDX) is rising to 99.2 after falling from around 100.

• US import prices came in up 1,3% vs 0,6% exp. and 0,2% previously while export prices rise 1,6% vs 0,6% exp. and 0,6% previously. The current account came in at -$190 billion vs -$208 bilion exp. and -$226 billion previously. Silver is up almost 1% today rising to $72 per ounce while gold surges almost 1,4% exceeding $4550 per ounce.

Analyst upgrades in focus

• Croda was upgraded to overweight from equal-weight at Morgan Stanley, making it the second bank to lift its rating on the stock this week. Analysts pointed to the UK chemicals group’s pricing power relative to peers.

• Roche was upgraded to buy at Intron Health, with the recent selloff seen as excessive and upcoming catalysts viewed as supportive for the investment case.

• Novonesis was double-upgraded to buy at Citi. Citi said the Danish enzymes and biopharma ingredients company’s recent valuation reset now offers a more attractive entry point.

Sector calls: oil and chemicals

• Morgan Stanley said the oil market is unlikely to be viewed in the same way as before the latest Middle East conflict. The bank upgraded the sector view to attractive and revised its order of preference.

• JPMorgan said the European chemicals sector could see material near-term earnings upside from Middle East-related developments, although the scale and duration would depend on how long disruptions last and how demand elasticity evolves.

Main analysts upgrades / downgrades

• BP raised to overweight at Morgan Stanley.
• Croda raised to overweight at Morgan Stanley; target price 3,350 pence.
• Diageo raised to neutral at BNP Paribas; target price 1,450 pence.
• Equinor raised to equal-weight at Morgan Stanley; target price 388 kroner.
• Evli raised to buy at Inderes; target price 25 euros.
• Lanxess raised to overweight at JPMorgan; target price 18 euros.
• Novonesis raised to buy at Citi; target price 415 kroner.
• Prosus raised to overweight at Morgan Stanley; target price 51 euros.
• Repsol raised to overweight at Morgan Stanley.
• Roche raised to buy at Intron Health.
• SIG Group raised to buy at UBS; target price 15 Swiss francs.
• Stadler Rail raised to neutral at UBS; target price 20 Swiss francs.
• ALK-Abello cut to hold at Nordea.
• Galp cut to equal-weight at Morgan Stanley.
• Shell cut to equal-weight at Morgan Stanley.

New initiations and reinstatements

• Galderma reinstated by Citi; target price 165 Swiss francs.
• Kingspan initiated at outperform by RBC; target price 97 euros.
• ProCredit Holding initiated at buy by Berenberg; target price 15.50 euros.
• Rockwool initiated at perform by RBC; target price 196 kroner.
• Talanx initiated at overweight by JPMorgan; target price 125 euros.
• Vicore Pharma initiated at buy by Guggenheim; target price 38 kronor.

DE40 (D1 interval)

Source: xStation5