Broker Cuts Rating Following Clinical Disappointment
AstraZeneca (LSE:AZN) came under pressure on Monday after HSBC lowered its recommendation on the pharmaceutical giant to Hold from Buy and reduced its price target from 16,500p to 13,750p following the failure of the Phase 3 Wainua study to achieve its primary endpoint.
“Wainua setback impairs our bull case, given the more difficult catalyst path ahead,” HSBC analyst Rajesh Kumar said.
Shares fell 1.3% in London trading, while the company’s U.S.-listed stock declined 1.5% in premarket dealings.
Delayed Growth Catalysts Shift the Risk Profile
HSBC noted that its previous bullish stance had been supported by expectations for the CARDIO-TTR programme, which it believes represents a market opportunity worth more than US$5 billion.
Although the broker still sees a route to annual peak revenue above US$80 billion by 2030, it believes that outlook now relies on a series of higher-risk clinical milestones that are not expected to materialise before 2027.
Focus Moves to SERENA-4 and AVANZAR
The investment bank also expressed caution over AstraZeneca’s next major clinical updates, particularly the SERENA-4 and AVANZAR studies due in the second half of 2026.
HSBC said its own analysis leaves it “rather uncomfortable” about the prospects for both programmes.
Kumar also warned that another string of unsuccessful trial outcomes could damage confidence in the company’s research engine.
“if three trials fail in a sequence, the widely held view of Astra’s market-leading R&D platform might lose its shine,” he said.
HSBC Sees Limited Upside in the Near Term
According to HSBC, weaker-than-expected results from the remaining 2026 clinical catalysts could intensify concerns over AstraZeneca’s ability to replace revenue lost through major patent expiries expected in the early 2030s.
The broker believes this could restrict further gains in the shares over the next six to nine months, leaving investors increasingly dependent on a stronger pipeline of catalysts in 2027.
“We downgrade the stock to a Hold rating (from Buy) as we no longer find the risk-reward balance attractive, particularly with the remaining catalyst path for 2026 (SERENA 4, AVANZAR) skewed to downside risks,” Kumar concluded.
Semiconductor stocks came under widespread selling pressure on Monday after SK Hynix posted the largest single-day decline in its history, prompting investors to lock in gains following the company’s recent Nasdaq debut while renewed geopolitical tensions added to market caution.
The weakness spread from Asian markets into Europe and U.S. premarket trading, highlighting growing concerns over lofty valuations in AI-related technology shares despite continued strength in long-term demand.
SK Hynix Sparks Global Selloff
SK Hynix shares slumped more than 15% in South Korea, setting a new record for the company’s biggest daily decline.
The move followed a strong rally that saw the stock more than triple this year ahead of last week’s U.S. listing, encouraging investors to take profits.
Samsung Electronics (USOTC:SSNHZ) also traded lower, helping push the KOSPI index down 9% and triggering a temporary 20-minute trading halt.
European Semiconductor Sector Weakens
Selling pressure extended across European technology stocks shortly after markets opened.
ASMI (EU:ASM), ASML (EU:ASML) and Besi (EU:BESI) each fell between 1% and 2%, while STMicroelectronics (EU:STMPA) slipped around 1%.
Infineon (TG:IFX) was among Germany’s weakest performers, declining roughly 2%.
U.S. Chip Stocks Set for Lower Open
U.S. semiconductor names also pointed to a weaker start.
Western Digital (NASDAQ:WDC), Micron (NASDAQ:MU), SanDisk (NASDAQ:SNDK), Seagate (NASDAQ:STX), AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC) all traded sharply lower ahead of the opening bell.
Strong AI Outlook Meets Profit-Taking
SK Hynix raised more than $26 billion through its American Depositary Receipt offering last week, with the shares priced at $149 before opening at $170 and ending their first trading session up 12.8%.
“The current memory upcycle is tracking substantially stronger than expected, but our base case continues to assume normalisation in cycle dynamics, limiting upside at current levels,” said Lorraine Tan, a director at Morningstar.
Although demand for high-bandwidth memory chips used in AI data centres remains robust, Monday’s decline suggests investors are becoming increasingly cautious after the sector’s remarkable gains this year.
Gold prices recovered from their lowest levels of the session on Monday as renewed geopolitical tensions increased demand for defensive assets, although expectations of higher U.S. interest rates continued to cap gains.
The precious metal remained under pressure from rising Treasury yields and a stronger dollar, even as investors sought safety following the latest escalation between the United States and Iran.
Precious Metals Remain Under Pressure
At 01:05 ET (05:05 GMT), spot gold (XAU/USD) traded 1.54% lower at $4,057.76 an ounce, while Gold Futures fell 1.17% to $4,065.45 an ounce.
Silver (XAG/USD) declined 2.80% to $58.19 an ounce, and platinum (XPT/USD) slipped 1.61% to $1,604.60 an ounce.
Middle East Conflict Keeps Safe-Haven Demand Elevated
Investor demand for defensive assets strengthened after the United States launched fresh strikes against Iranian targets over the weekend in response to an attack on a Cyprus-flagged cargo ship in the Strait of Hormuz.
Iran subsequently announced that the strategic shipping corridor would remain closed “until further notice,” although U.S. officials rejected the claim, keeping uncertainty over regional stability elevated.
Oil Rally Strengthens Inflation Concerns
Crude prices remained more than 3% higher after giving back part of an earlier surge of nearly 5%.
The possibility of prolonged disruptions to energy supplies has renewed concerns that inflation may remain stubbornly high, potentially forcing the Federal Reserve to maintain restrictive monetary policy for longer.
Higher interest rates typically reduce the attractiveness of gold because the metal does not generate income.
Minutes from the Fed’s June meeting showed that several policymakers continued to see justification for further tightening, while inflation remained a greater concern than labour market conditions.
Inflation Data and Fed Signals Could Drive the Next Move
Markets are now focused on Tuesday’s U.S. inflation report and Federal Reserve Chair Kevin Warsh’s congressional testimony.
IG analyst Tony Sycamore said gold remains highly responsive to both inflation data and geopolitical developments.
He noted that support around the $4,000 level remains intact, while a sustained move above $4,200-$4,220 could improve the technical outlook toward the 200-day moving average near $4,491.
However, stronger-than-expected CPI data could strengthen the U.S. dollar and reinforce expectations of another interest-rate increase before year-end.
The U.S. Dollar Index rose 0.3% on Monday, adding further headwinds for bullion.
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eToro: Copy Trading Explained
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eToro: Fees and Charges Breakdown
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eToro: Is It Safe for UK Investors?
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Oil prices remained firmly higher during European trading on Monday after giving back part of an earlier rally of almost 5%, as renewed military action between the United States and Iran continued to fuel concerns over crude supplies moving through the Strait of Hormuz.
By 03:43 ET (07:43 GMT), Brent crude futures were up 3.5% at $78.68 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 3.5% to $73.89 a barrel. Both benchmarks had climbed close to 5% earlier in the session before easing slightly.
Middle East Escalation Revives Supply Concerns
The latest advance followed a fresh escalation in regional tensions after Iran widened its missile and drone attacks on Sunday to include Gulf states such as Qatar and the United Arab Emirates in response to recent U.S. military action.
Tehran also announced that the Strait of Hormuz had been closed after a commercial vessel was struck, renewing fears over the security of one of the world’s most strategically important oil shipping routes.
Although U.S. officials rejected the claim, President Donald Trump maintained that commercial shipping remained protected and that vessels could continue using the waterway.
While Washington insisted the Strait remained operational, shipping companies adopted a more cautious approach over the weekend.
According to vessel-tracking data, only six ships passed through the Strait of Hormuz on Sunday, marking the lowest daily traffic in five weeks and highlighting growing concerns over maritime security.
“Shipping operators are adopting a cautious approach and inbound movements have slowed under heightening security concerns,” ANZ analysts said in a note.
Markets Question the Stability of the Ceasefire
ANZ noted that crude prices had surrendered part of last week’s gains after both the United States and Iran initially appeared reluctant to broaden the conflict.
The bank pointed to Washington’s decision not to target Iranian energy infrastructure directly and the start of diplomatic discussions late last week as signs of restraint.
However, the renewed military action over the weekend and Iran’s latest declaration that the Strait of Hormuz was closed have once again raised doubts about the durability of last month’s interim agreement.
Strategic Waterway Remains Critical for Global Oil Trade
The Strait of Hormuz is the primary export route for crude shipments from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and other Gulf producers.
Any prolonged disruption could force refiners—particularly across Asia—to secure alternative supplies while increasing freight and insurance costs throughout the energy market.
Investors are also watching for any coordinated response from major oil-producing nations or the potential release of strategic petroleum reserves should supply disruptions become more severe.
IEA Warns Supply Recovery Could Be at Risk
Last week, the International Energy Agency (IEA) warned in its latest monthly report that renewed hostilities between the United States and Iran could threaten the expected recovery in global oil supplies if shipping through the Strait of Hormuz remains disrupted.
The agency said worldwide oil supply increased by 4.1 million barrels per day in June after crude exports through Hormuz resumed, although production remained well below levels seen before the conflict.
The IEA expects global supply to continue recovering in 2027, provided shipping through the strategic waterway continues to improve.
Global markets opened the week cautiously as renewed conflict between the United States and Iran sent crude prices sharply higher, pressured equity futures and shifted investor focus toward a crucial week of second-quarter earnings.
At the same time, heavy selling in Asian semiconductor stocks has sparked debate over whether enthusiasm for artificial intelligence shares is beginning to cool, even as demand for advanced chips remains strong.
Investors Respond to Geopolitical Risks
U.S. equity futures traded mixed after another exchange of military strikes between Washington and Tehran heightened uncertainty over the global economic outlook.
At 04:53 ET (08:53 GMT), S&P 500 futures were down 0.3%, Nasdaq 100 futures had fallen 1%, while Dow Jones futures edged up 0.03%.
Technology stocks looked set to underperform following sharp losses among Asian chipmakers, while traders also prepared for a wave of quarterly earnings reports expected to provide fresh insight into corporate investment and AI-related spending.
Hormuz Uncertainty Keeps Markets on Edge
Attention remains focused on the Strait of Hormuz after conflicting statements from the United States and Iran regarding access to the strategic shipping route.
U.S. Central Command said it had launched additional strikes against Iranian targets to reduce threats to commercial shipping, while President Donald Trump maintained that the passage remained open.
Iran, however, continued to insist that the Strait had been closed.
With roughly 20% of the world’s seaborne oil moving through the waterway, investors remain alert to any disruption that could intensify inflationary pressures and weigh on global growth.
Oil Prices Extend Their Advance
Energy markets continued to rally as geopolitical risks mounted.
Brent crude gained 4.8% to $79.65 a barrel, while West Texas Intermediate rose 5% to $74.98 after both benchmarks had already posted strong gains during the previous week.
Higher oil prices are generally supportive for energy producers but can increase costs for industries such as aviation, logistics and consumer discretionary businesses through higher fuel and transportation expenses.
Semiconductor Sector Faces Profit-Taking
Asian semiconductor stocks came under pressure, led by a near-14% decline in SK Hynix shares despite the company’s successful Nasdaq debut.
The weakness pushed South Korea’s KOSPI index down more than 5%, temporarily triggering a trading halt.
The decline appeared to reflect investor profit-taking ahead of earnings season rather than any deterioration in demand for AI hardware.
Meanwhile, Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) continued to demonstrate strong underlying demand, reporting a 36% year-on-year increase in second-quarter revenue to T$1.27 trillion.
Corporate Results Become the Main Focus
While geopolitical developments continue to dominate headlines, investors are increasingly turning their attention to second-quarter earnings.
The upcoming results will be closely scrutinised to determine whether companies can continue delivering the earnings growth needed to support elevated market valuations, particularly across the technology sector.
European wholesale natural gas prices climbed sharply on Monday, reaching their highest level in more than a month after renewed conflict in the Middle East heightened concerns over global liquefied natural gas (LNG) supplies.
Traders reacted to reports surrounding the Strait of Hormuz, a key shipping route for LNG exports, prompting another rise in energy prices across Europe.
Benchmark Gas Contracts Move Higher
The Dutch front-month gas contract, Europe’s benchmark, gained 3.5% in early trading to €50.37 per megawatt-hour.
The equivalent UK contract also advanced, rising 4% as energy markets responded to the latest geopolitical developments.
The gains followed a weekend of escalating military exchanges between the United States and Iran, increasing fears of potential supply disruptions.
Strait of Hormuz Back in Focus
The latest rally was triggered after Iran announced that the Strait of Hormuz had been “closed until further notice.”
Although the U.S. Central Command said the strategic shipping corridor remained open to commercial traffic, the possibility of a prolonged disruption was enough to unsettle energy markets.
The Strait of Hormuz is one of the world’s most important energy transport routes, carrying around one-fifth of global LNG trade, including a significant proportion of exports from Qatar.
Geopolitical Risks Return to the Fore
Recent weeks had seen gas prices ease as investors became more optimistic that diplomatic efforts would prevent a wider regional conflict.
The renewed military escalation has reversed that sentiment, with analysts warning that volatility is likely to remain elevated while uncertainty persists.
Storage Levels Increase Importance of Supply
European countries are continuing to replenish gas storage ahead of the 2026/2027 winter heating season.
However, storage facilities are currently around 47% full, below the 56% level recorded at the same point last year.
Market participants warn that any prolonged reduction in LNG exports from the Gulf could intensify competition between Europe and Asia for available cargoes, placing further upward pressure on natural gas prices.
FTSE 100 edges higher as oil prices climb on Middle East tensions, while Genedrive and PageGroup lead the UK corporate headlines.
Market Overview
The FTSE 100 opened 0.01 per cent higher at 10,498.05, while the Euronext 100 slipped 0.09 per cent to 1,906.09 and Germany’s DAX fell 0.12 per cent to 25,036.04. Overnight, the Nasdaq closed higher at 26,281.61 and the S&P 500 gained to 7,575.39 as investors assessed renewed tensions in the Middle East after US strikes on Iran, driving a sharp rise in oil prices and tempering risk appetite across European markets.
Commodity markets reflected the geopolitical backdrop, with Brent crude strengthening sharply while gold also edged higher on safe-haven demand. Copper weakened alongside natural gas, while Bitcoin traded lower. Against sterling, the US dollar, Swiss franc, euro and Japanese yen all strengthened slightly, while the Australian dollar was little changed.
Market Numbers
FTSE 100: Up (+0.01%), 10,498.05 Euronext 100: Down (-0.09%), 1,906.09 DAX: Down (-0.12%), 25,036.04 NASDAQ: Up, 26,281.61 S&P 500: Up, 7,575.39
In the Headlines
Annual results – Genedrive (LSE:GDR) Genedrive reported higher annual revenue as adoption of its NHS-approved pharmacogenetic test accelerated and international commercial activity expanded. The update highlights growing momentum in the company’s commercial rollout and supports its long-term growth strategy.
Trading update – PageGroup (LSE:PAGE) PageGroup maintained its full-year outlook after second-quarter trading improved from the first quarter, with demand stabilising across several regions. The update suggests recruitment markets remain challenging but are showing signs of recovery.
Currencies (vs GBP)
USD: Down (-0.02%), $1.3386 CHF: Down (-0.02%), Fr.1.0836 EUR: Down (-0.04%), €1.1738 JPY: Down (-0.02%), ¥216.7225 AUD: Up (+0.00%), $1.9282 Bitcoin (BTC/GBP): Down, £47,039.00
Commodities
Copper: Down Gold: Up Brent Crude: Up Natural Gas: Down
European equity markets opened lower on Monday as renewed conflict in the Middle East weighed on investor sentiment, while a sharp rise in oil prices supported energy stocks after Iran announced the closure of the Strait of Hormuz.
The pan-European STOXX 600 slipped 0.2% in early trading. Germany’s DAX lost 0.3%, France’s CAC 40 declined 0.2%, while London’s FTSE 100 outperformed with a 0.2% gain, supported by its heavy weighting in oil majors.
Energy Stocks Outperform
The jump in crude prices lifted shares across the European energy sector.
Shell (LSE:SHEL) rose 1.8%, while BP (LSE:BP.) advanced 2.7%. TotalEnergies (EU:TTE) gained 2.3%, with Maurel & Prom (EU:MAU), Eni (BIT:ENI) and other oil producers also benefiting from the stronger commodity backdrop.
The rise in energy stocks helped limit losses across the broader European market.
Strait of Hormuz Concerns Lift Crude Prices
Investor sentiment deteriorated after hostilities between the United States and Iran intensified over the weekend.
Iran’s Revolutionary Guards announced that the Strait of Hormuz had been closed “until further notice” following an attack on a commercial vessel and subsequent U.S. military retaliation.
U.S. Central Command disputed the claim, stating that the strategic shipping route remained open to lawful maritime traffic.
Even so, fears of potential disruption along a passage responsible for transporting around one-fifth of global seaborne oil supplies sent energy markets sharply higher.
Both Brent crude and West Texas Intermediate (WTI) climbed by more than 4.4%.
Recent Market Rally Faces Pressure
Monday’s decline marked a reversal after European equities recovered ground during the latter part of last week.
Technology companies and semiconductor stocks had led those gains, supported by optimism over artificial intelligence investment and hopes that diplomatic efforts in the Middle East would ease geopolitical tensions.
With the latest escalation, investors are now reassessing risk exposure, and further weakness could erase much of last week’s recovery.
Markets Await ECB Signals
Attention later in the day will turn to comments from European Central Bank Executive Board member Isabel Schnabel.
Investors will be looking for fresh clues on the outlook for interest rates, particularly given Schnabel’s reputation as one of the ECB’s more hawkish policymakers and her consistently cautious approach to reducing borrowing costs.
Akzo Nobel Advances on Takeover Interest
Among individual movers, Akzo Nobel (EU:AKZA) gained around 3% after Nippon Paint submitted an offer for the company’s decorative paints business.
Eurozone government bond yields remained close to multi-week highs on Monday as investors assessed the inflationary impact of rising oil prices against the traditional safe-haven appeal of sovereign debt.
Growing concerns over energy supply disruptions following renewed tensions in the Middle East have strengthened expectations that inflation could remain higher for longer, keeping upward pressure on yields.
German Bond Yields Hold Near Recent Peaks
Germany’s 10-year Bund yield, the benchmark for the euro area, stood at 3.05%, holding on to most of the gains recorded in recent sessions.
The policy-sensitive two-year German yield also remained elevated at 2.68%.
Both maturities continue to trade around their highest levels in more than a month as investors reassess the outlook for inflation and monetary policy.
Oil Price Rally Changes Market Focus
Bond markets reacted to reports over the weekend that Iran had declared the Strait of Hormuz “closed until further notice,” raising concerns over potential disruptions to global energy supplies.
The announcement contributed to a 4.4% rise in Brent crude prices, prompting investors to revisit inflation expectations rather than focus solely on the defensive qualities of government bonds.
Normally, periods of geopolitical uncertainty encourage demand for sovereign debt, pushing yields lower. However, the prospect of higher energy costs has instead kept yields supported.
Markets Reconsider ECB Rate Outlook
Monday’s trading followed a difficult week for European government bonds, which recorded their sharpest decline in more than a month as escalating geopolitical risks drove yields higher.
Germany’s 10-year Bund yield posted its largest weekly increase in five weeks as traders increased bets that the European Central Bank could pause its interest rate-cutting cycle if persistent energy price pressures keep inflation elevated.
Investors Await ECB Commentary
Attention now turns to comments expected later in the day from European Central Bank Executive Board member Isabel Schnabel.
As one of the Governing Council’s more hawkish policymakers, her remarks will be closely monitored for indications of how the ECB views the inflation risks arising from the latest developments in the Gulf.
Any indication that the central bank sees a greater risk of sustained inflation could influence expectations for future interest rate decisions and drive further moves across European bond markets.
