[MARKET ANALYSIS] European bourses gain despite geopolitics, pharma names react to Trump's latest tariff threat

European equity futures are mostly in the green, following on from a positive APAC session; upside which comes despite the ongoing US-Iran conflict and elevated energy prices. For the UK, a cooler/in-line inflation report lessens the need for a BoE hike, though the ongoing geopolitical environment will keep policymakers wary on the path ahead. As it stands, money markets assign a 12% chance of a hike next week, and fully priced in by November. European sectors hold a positive bias; Energy and Insurance tops the pile, whilst Tech lags, joined by Consumer Products and Services. Unsurprisingly, the increased energy prices have boosted the Energy sector to the top of the pile. European pharma names broadly opened with mild losses, but have since climbed into the green. President Trump stated that generic drugs will not be subject to US tariffs until 2028 but will then face 100% levies. Given European pharma names typically produce exclusive/high-patented drugs, for reference, the Indian pharma sector fell as much as 2% in APAC trade. However, the likes of Sandoz (-2.9%) and Bayer (-1.1%) have extended lower this morning. Key movers: Iberdrola (H1 profit rose, but missed exp.) -0.6%, Lonza (lifted FY target after a strong half, but perhaps disappointed on some elevated expectations) -3.9%, Equinor (strong headline metrics and announced USD 3bln share buyback for 2026) +2.4%, Akzo Nobel (headline metrics topped expectations, and affirmed guidance) +1.3%, Airbus (Co. targets Adj. EBIT of EUR 12-13bln in 2029 and approves a EUR 5bln buyback over three years) +6.9%. US equity futures are trading with losses, with underperformance in the tech-heavy NQ. Pressure which appears to be a bit of a pull-back from recent strength, and as the KOSPI more-or-less erased most of its overnight gains towards the end of the APAC session. Sticking on tech, SK Hynix denied a report which suggested that the Co. was in talks to buy Intel’s (-3%) Ohio plant. Ahead, focus will be on earnings from Tesla, IBM, and Alphabet.