Before the bell: problems in Europe and opportunities in Asia

French bank stocks take a beating. EssilorLuxottica has its eye on Nikon.

French politics are weighing on European equities. On average, European shares lost 1.1% yesterday. In Brussels, the Bel20 (-0.5%) fared better. The French CAC40 was the laggard, dropping 1.7%. The biggest losers among our southern neighbors were the bank stocks Société Générale (-6.8%), Crédit Agricole (-5.4%), and BNP Paribas (-4.2%). The French government’s precarious position is making investors nervous. The extent of the turmoil is also visible in French long-term yields (3.5%), now nearly on par with Italy’s (3.57%)—traditionally the weakest student in Europe’s class. Across the Atlantic, both the S&P 500 and Nasdaq gained 0.4%. Keurig Dr Pepper (-6.9%) was once again the big loser, while Eli Lilly (+5.9%) reported strong results for its weight-loss pill Orforglipron. More on that could already be read yesterday in “Na de bel.”

This morning in Asia, the main indices in Hong Kong and Japan were unchanged. In the U.S., we will soon get earnings from department store chain Kohl’s and tech players Snowflake and Crowdstrike. At 11 p.m. our time, markets await the highly anticipated results of AI chip designer Nvidia.

Love for China

Chinese chip developer Cambricon Technologies saw its revenue surge by more than 4,000%, driven mainly by soaring demand for semiconductors powering artificial intelligence. Beijing is steering major tech companies away from American chipmakers such as Nvidia and AMD, urging a preference for domestic suppliers instead. Key customers of Cambricon include DeepSeek, the Chinese counterpart to ChatGPT, as well as ByteDance, the company behind TikTok, and Tencent. Cambricon’s share price has already doubled this year on the Shanghai Stock Exchange, with another 9% added this morning. Whether Cambricon’s boom will also be reflected in Nvidia’s numbers is something we’ll find out tonight.

Love for Japan

Franco-Italian eyewear giant EssilorLuxottica has its sights on Japan’s Nikon Corp. The company already holds nearly 9% of the optical equipment maker and now aims to raise that stake to 20%. Negotiations are underway not only with Nikon but also with the Japanese government. Nikon, besides making optical instruments for photography, also produces lithography equipment used in semiconductor manufacturing—placing it among the very few firms competing with Dutch champion ASML. Nikon counts TSMC, Samsung, and Intel among its clients. Given the strategic importance of Nikon’s technology for Japan, approval of the deal is far from certain. Nikon and EssilorLuxottica have already been partners since 2000 through their joint venture Nikon-Essilor, which combines their expertise in lens production.

Did you know…

that Canon, the other Japanese camera maker, is also active in lithography, producing semiconductor manufacturing equipment? Whether in photography or lithography, both fields are about reproducing two-dimensional images—and that is know-how camera makers have mastered brilliantly.

This article was translated from Dutch and was originally published on Spaarvarkens.be.