Market wrap: European stocks attempt to stabilize despite the surge in oil prices 🔍

Europe is attempting to recover after a weaker open, with Germany’s DAX now trading close to flat. Investors still need to reprice rising geopolitical risk as Brent crude gradually moves back toward $100 per barrel. Fresh reports of tanker attacks, port disruptions, and additional waves of drone and missile strikes in the Middle East continue to weigh on global sentiment, while the earlier release of strategic reserves by the IEA is largely seen as a short-term buffer rather than a lasting solution.

• European index futures are rebounding after a weaker start, following a modest improvement in sentiment on Wall Street. Nevertheless, the Euro Stoxx 50 is still down around 0.3%.
• Wednesday’s market reaction suggested that the IEA’s strategic reserve release was not viewed as a structural turning point, but rather as temporary relief amid the prolonged conflict with Iran.
• Meanwhile, bond markets remain under pressure, which further complicates the outlook for European equities, particularly for sectors sensitive to financing costs.
• Asia ended the session firmly in the red: the MSCI Asia Pacific index fell 1.3%, Topix dropped 1.3%, and Taiwan’s Taiex declined 1.6%. Markets in Hong Kong and mainland China also closed lower.
• Cryptocurrencies are maintaining a cautious upward trend, with Bitcoin trading near $70,500. Gold and silver are also gaining, with silver rising more than 2% and moving above $86 per ounce.
• European companies with exposure to private credit may attract attention after Morgan Stanley and Cliffwater capped withdrawals from their multi-billion-dollar private credit funds following heavy redemption requests from investors.

Stock news

• Repsol received a double upgrade to outperform from RBC Capital Markets, with analysts expecting refining margins to remain elevated throughout 2026 amid disruptions linked to the US-Israel-Iran conflict.

• Neste was upgraded to outperform from sector perform by RBC, which sees the Finnish renewable fuels producer benefiting from the current geopolitical environment.

• Hochschild Mining was raised to overweight from neutral by JPMorgan, which points to support from strong gold and silver prices as well as an attractive entry point after the recent share price decline.

• Ferragamo reported better-than-expected full-year results, and management struck a confident tone regarding year-to-date performance. However, some analysts remain cautious, noting that the turnaround process will still require time and patience.

Chart: DE40 (D1 timeframe)

Source: xStation5

Changes in analyst recommendations

Upgrades

• Epiroc – upgraded to overweight at Morgan Stanley; PT 262 SEK

• Faron Pharma – upgraded to buy at Inderes

• Hochschild Mining – upgraded to overweight at JPMorgan; PT 990 pence

• Impianti – upgraded to outperform at EnVent S.p.A.; PT €1

• Neste – upgraded to outperform at RBC; PT €30

• Nichols – upgraded to buy at Deutsche Bank; PT 1,150 pence

• Rentokil – upgraded to buy at UBS; PT 540 pence

• Repsol – upgraded to outperform at RBC; PT €25

Downgrades

• Also – downgraded to hold at Berenberg; PT 165 CHF

• Bodycote – downgraded to sector perform at RBC; PT 775 pence

• Quilter – downgraded to underperform at Avior Capital Markets

• Sandvik – downgraded to equal-weight at Morgan Stanley; PT 356 SEK

Initiations

• Asta Energy Solutions – initiated with add at Baader Helvea

• Aumovio – initiated with outperform at Oddo BHF; PT €50

• CSG – initiated with accumulate at Erste Group; PT €36

• Eviso – initiated with outperform at Mediobanca; PT €10.20

• INVISIO AB – initiated with hold at ABG; PT 280 SEK

Reinstatements

• Pennon – reinstated with outperform at BNP Paribas; PT 575 pence

Shares of Germany’s Rheinmetall are attempting to stabilize after yesterday’s sell-off, though the stock remains below the €1,640 level where the EMA200 (red line) is located.

Source: xStation5