[MARKET ANALYSIS] Defensives outperform as upbeat TSMC guidance fails to halt a chip selloff

European bourses point to a mixed picture, with so-called defensives (FTSE 100 +0.3%, SMI +0.4%) outperforming while cyclical-heavy indices (DAX 40 -0.3%, AEX -0.9%) underperform, primarily driven by the continued selloff in chip and memory names. TSMC earnings failed to result in a rebound in the tech space, despite a better-than-expected revenue outlook. In brief, Q3 net income topped estimates while gross margin printed a tick lower than consensus. The chipmaker projected Q4 sales as much as USD 54.3bln (exp. USD 48.8bln), which should result in a c. +44% rise in 2026 revenue in USD. Following the Q3 release, analysts at Saxo Markets see this as a much-needed vote of confidence in the AI demand story, amid a selloff triggered by growing signs of stress (see CoreWeave below). Sectors have a slight positive tilt. Telecoms lead, with Food, Beverages & Tobacco and Insurance rounding out the sector gainers. Unsurprisingly, Tech is the sector laggard, with Basic Resources and Industrials following behind. Key movers include: Pernod Ricard +1.6%, Q1 organic sales beat estimates and expects underlying trends in China to improve; TomTom -4.7%, Q3 revenue misses expectations and announces organisational changes that will impact 200 roles; Ericsson +8.9%, Q3 revenue tops consensus, helped by solid demand for mobile network equipment; Nordea -6.4%, slight misses in Q3 metrics and pauses share buyback as it awaits ECB authorisation. US equity futures are mixed, with the NQ and ES being weighed on by tech names. AI funding has returned as a worry for investors, with the Broadcom CEO recently highlighting concerns about AI buildout financing. Additionally, CoreWeave has been pressured, with shares plunging 15% in the prior session (-6% pre-market) as it has been heavily reliant on the high-yield debt markets to finance its build out.