Market Wrap: Capital Flows Back into Tech; ASML Rises 2.5%🚀

The European session has opened amid a return to risk-on sentiment, despite the US-Iran conflict escalating further – S&P 500 futures are up 0.3 per cent, Nasdaq 100 futures are up 0.61 per cent, and Dow Jones futures are up around 0.15 per cent. The main factor driving the market is tension in the Middle East: President Trump announced the end of the ceasefire with Iran, following which the US carried out new air strikes on Iranian targets in response to the attack on oil tankers in the Strait of Hormuz, which triggered a wave of risk aversion as early as Wednesday.

Despite this, European indices are rebounding on Thursday – the Stoxx 600 is up 0.5 per cent, whilst the French CAC 40 and the German DAX are both up 0.6 per cent, although the London FTSE 100 is down 0.2 per cent, dragged down by AstraZeneca’s slump. WTI crude, following a sharp 6 per cent jump on Wednesday, remains elevated, although it retreated slightly on Thursday morning amid expectations of a possible resumption of talks, trading closer to $77 per barrel. The US dollar is holding at weekly highs – the DXY index is trading around 100.9–101.2 points, supported by demand for safe-haven assets and expectations of Fed rate hikes in response to the inflationary impact of higher oil prices, with the Japanese yen under particular pressure, testing the 162.5–162.7 level against the dollar.

On the European stock market, the technology and materials sectors are leading the gains – ASML shares are up 2.6 per cent, Siltronic +10.5 per cent and Soitec +4.5 per cent, further buoyed by reports that Chinese AI firms may gain access to Nvidia’s H200 chips. The healthcare sector is performing the worst, falling by around 1.5% due to AstraZeneca’s slump, whilst the food and telecoms sectors also remain under pressure. Spain’s IBEX is rebounding by 1.1% following earlier falls linked to Trump’s comments on NATO policy. Source: XTB

Company information

• AstraZeneca is down by as much as 9–10 per cent – its worst day since March 2020 – after the drug Wainua (in collaboration with partner Ionis) failed to meet the primary endpoint of a Phase III trial for the treatment of ATTR-CM (amyloid cardiomyopathy), which is casting doubt on the management’s credibility in the design of clinical trials.

• Ionis Pharmaceuticals’ shares have plummeted by 12.5–13.8 per cent, whilst its competitors with ready-to-market therapies for ATTR-CM – Alnylam and BridgeBio – have risen by 11–16 per cent respectively, as Wainua’s failure strengthens their market position.

• Hugo Boss is advising its shareholders to reject the takeover bid from Frasers Group, arguing that the proposed price of 38 euros per share (a premium of just 4.3 per cent) does not reflect the company’s value and potential.

• SK Hynix has seen demand exceed supply by more than seven times ahead of its US stock market debut on Friday, whilst the company’s shares in Seoul are up 5.3 per cent.

• Nordex rises by 5% following the announcement of a rise in project orders in the second quarter to 3,054 MW, driven by strong demand from the US, whilst Computacenter jumps by 11.1% thanks to better-than-expected results, supported by demand for AI infrastructure.

• Novo Nordisk is launching Awiqli, a once-weekly insulin injection, in India, hoping to accelerate its expansion in the diabetes market, which has over 100 million patients, although the company continues to face competition from Eli Lilly and local generic manufacturers.