DE40: Fifth Session of Losses; Energy Stocks Buck Selloff on Supply Fears

• DAX drops for the fifth straight session, pressured by geopolitical tensions

• Energy stocks defy the broader sell-off

• Novo Nordisk overtakes SAP as Europe’s most valuable company

European markets join the world-wide sell-off, following the abrupt escalation of conflict in the Middle East. The comeback of a broad risk-off sentiment brings down the vast majority of equities, as capital outflows towards safe heaven assets like bonds and gold. One major exception is the European energy sector, which gains 2.25% in response to the expected hike in energy prices, as the conflict pressures up the contracts on key commodities.

European natural gas prices surged sharply after Israel launched airstrikes on Iran, escalating regional tensions and raising fears of disruptions to global energy supplies, particularly through the critical Strait of Hormuz. Benchmark futures jumped over 6%, driven by concerns that the conflict could impact LNG exports from key producers like Qatar, Oman, and the UAE, which together account for 18% of global LNG supply. Although no physical disruptions to shipments have occurred yet, potential delays loom, and further escalation could push gas prices above €100/MWh. Compounding the market anxiety are outages in Norway and a temporary shutdown of Israel’s Leviathan gas field, all of which threaten Europe's efforts to replenish gas reserves ahead of winter.

Today’s performance of DAX-listed companies. Source: Bloomberg Finance LP

Volatility in the sectors of Eurostoxx 600 Index. Source: Bloomberg Finance LP

DE40 (D1)

The German DAX fell for a fifth straight day, slipping below its 30-day exponential moving average (EMA30, light purple). However, the decline paused at the 23.6% Fibonacci retracement level, which is currently acting as key support. Looking ahead, rising energy prices could cloud the long-term outlook for European equities, potentially challenging the ECB’s baseline scenario for rate cuts in 2025. If concerns about energy supply disruptions grow, business confidence may weaken further. The Fibonacci level remains critical, with the next support zone seen between 22,250 and 22,450.

Source: xStation5

Company news:

• French banking group BPCE will acquire Portugal’s Novo Banco from Lone Star in a €6.4 billion deal, marking Europe’s largest cross-border bank acquisition in over a decade. The Portuguese government will also sell its 25% stake. The move boosts BPCE’s European footprint and reflects investor confidence in Portugal. No job cuts are planned. The transaction, expected to close in H1 2026, adds to a strong year of bank M&A amid broader consolidation pressures in the eurozone.

• Novo Nordisk announced it will advance both subcutaneous and oral formulations of amycretin into phase 3 clinical trials for weight management, following positive phase 2 results and regulatory feedback. Amycretin is a dual GLP-1 and amylin receptor agonist designed to treat overweight, obesity, and type 2 diabetes. Phase 3 trials are set to begin in Q1 2026. The move marks a significant step in Novo Nordisk’s pipeline of innovative, long-acting treatments for metabolic disorders. As a result, Novo surpasses SAP as the most valued publicly traded European company.

• TotalEnergies, Air Liquide, and RWE have partnered to decarbonize TotalEnergies’ refineries in Belgium and the Netherlands through large-scale green hydrogen projects powered by the jointly developed OranjeWind offshore wind farm. The collaboration includes a €600 million investment in a 250 MW electrolyzer near Zeeland and a tolling agreement for 130 MW of green hydrogen production from Air Liquide’s ELYgator project for the Antwerp refinery. Together, these initiatives aim to cut CO₂ emissions by up to 450,000 tons annually and support TotalEnergies’ target to fully decarbonize its European refinery hydrogen use by 2030.

• RWE and Amazon Web Services (AWS) have signed a Strategic Framework Agreement to accelerate RWE’s digital transformation and support Amazon’s clean energy goals. The partnership builds on their existing 1.1 GW in U.S. renewable energy PPAs. AWS will provide AI and analytics tools to enhance RWE’s operations, trading, and energy forecasting. The collaboration also strengthens ties to RWE’s AI Lab in Seattle, helping both companies advance carbon-free energy initiatives and digital infrastructure aligned with growing electrification and sustainability demands.