German chemicals producer BASF BAS said it entered initial talks over a takeover of smaller peer Evonik, a tie-up that would bolster BASF’s dominant position in Europe’s chemicals industry. BASF said Friday it was in exploratory takeover talks with Evonik and the latter’s largest shareholder, a foundation called RAG-Stiftung. Evonik, a chemicals producer based in Essen, Germany, earlier Friday noted BASF’s non-binding approach. RAG-Stiftung, which holds a stake of 43.8% in Evonik, also confirmed the interest from BASF. None of the companies said how much money BASF was putting on the table for its bid. Evonik’s market capitalization stands at 8.42 billion euros ($9.58 billion), according to LSEG data. BASF, the much larger company, has a market cap of some 46.7 billion euros. The outcome of these talks remains uncertain at this stage, BASF said. The company said it “continuously evaluates” potential acquisitions that could strengthen its core business and fuel growth. “In doing so, BASF takes a disciplined approach,” the company said, adding that it would inform the market of any developments in line with regulatory requirements. In European late afternoon trading, Evonik shares were up 6.9% at 19.32 euros, while BASF shares traded 4% lower at 50.19 euros.

The Swiss market ended modestly higher on Friday, after moving in a narrow range in positive territory right through the session. Lower oil prices and bond yields amid hopes about potential opening of the Strait of Hormuz in seven days lifted investor sentiment. The benchmark SMI ended with a gain of 39.89 points or 0.29% at 13,945.71. The index, which advanced to 14,029.64 around mid morning, touched a low of 13,924.90 in the final hour. UBS Group climbed 3.5%. Schindler Ps moved up nearly 3%, while Partners Group, Logitech International, Julius Baer, VAT Group, Holcim and Swiss Life Holding gained 1.4%-1.7%. Amrize, Givaudan, Straumann Holding, Geberit, Novartis, Sika, Sandoz Group and Sonova also closed on firm note. Nestle, Roche, Kuehne + Nagel, ABB and Swiss Re shed 0.3%-1%.

Europe
European stocks closed higher on Friday as lower oil prices and bond yields amid renewed hopes about an end to the Middle East conflict and potential reopening of the Strait of Hormuz helped underpin sentiment. The pan European Stoxx 600 climbed 0.35%. The UK's FTSE 100 and Germany's DAX gained 0.14% and 0.58%, respectively. France's CAC 40 ended 0.04% down, while Switzerland's SMI closed up by 0.29%. Among other markets in Europe, Austria, Belgium, Greece, Ireland, Netherlands, Portugal, Spain, Sweden and Türkiye closed higher. Czech Republic, Iceland, Norway, Poland and Russia ended weak, while Denmark and Finland closed flat. In the UK market, miners and banking sector stocks posted strong gains. Lion Finance, Computacenter, Pershing Square Holdings, Standard Chartered, Fresnillo, Glencore and Smiths Group gained 2.2%-3.3%. Aberdeen Group, IAG, 3i Group, Next, Lloyds Banking Group, Barratt Redrow, Endeavour Mining, Barclays, Anglo American Plc, Natwest Group, JD Sports Fashion, AstraZeneca, Polar Capital Technology Trust, The Sage Group, Spirax Group, AstraZeneca and Associated British Foods also ended notably higher. Energy stocks Ithaca and BP lost 3.6% and 2.3%, respectively. Shell ended lower by about 0.8%. Bunzl, British American Tobacco, GSK, Imperial Brands, Centrica, Convatec Group and BAE Systems also ended weak. In the German market, Adidas, Commerzbank and Deutsche Bank gained 2.7%-3%. Daimler Truck Holding, Siemens Healthineers, Bayer, Siemens, Deutsche Post, Volkswagen, Brenntag, Fresenius Medical Care, Allianz, SAP and Fresenius also closed with impressive gains. HelloFresh tanked nearly 10% as the meal-kit company trimmed its outlook for the financial year 2026 after a sharper-than-planned cut in marketing spending undermined customer acquisition.

United States
U.S. stocks recovered from a couple of down sessions as oil prices fell on hopes for progress toward an agreement between the U.S. and Iran to open the Strait of Hormuz. The Dow Jones Industrial Average set the pace for Friday's gains, rising 478.6 points, or 0.93%, to 51828.6. The tech-heavy Nasdaq Composite climbed 129.3 points, or 0.48%, to 27068.7. The S&P 500 moved up 39.3 points, or 0.51%, to 7743.41. The indexes finished the week higher, despite a midweek selloff. The University of Michigan's consumer sentiment reading weakened in September, but wasn't as gloomy as the preliminary estimate. Consumers' inflation expectations, including for long-term inflation, have increased, the survey said. Meta Platforms dropped 3.3% to $751.66. The stock is giving back some of the gains it made this week from the well-received rollout of Meta's AI agent Muse. It closed the week up 13%. Microsoft ended the week with its highest close since November, rising 3.7% to $516.17, making it the best performer in the Dow Jones Industrial Average. The company announced new capabilities for its Copilot app, part of its push to monetize its artificial intelligence.

Asia
The start of the new week has seen a mixed performance on the East Asian stock markets. Chip shares and other shares with AI potential are under pressure as concerns resurface about the development of artificial intelligence proceeding too quickly and becoming uncontrollable. The heavily technology-weighted Seoul stock market is down by 2.1 per cent. Trading there had been suspended for two consecutive days due to public holidays.

Bonds
The leg-up for U.S. equities came in tandem with a pause in the global bond selloff. The yield on the 10-year U.S. benchmark pulled back after hitting a high of 5.228%. The 30-year yield settled at 5.5% after breaking above that level for the first time in 22 years. The two-year yield edged down to 4.862%.

Analysis
UBS initiates coverage on Cancom with a Buy rating – target 26 EUR
HSBC upgrades BP to Buy (Hold) – target 640 (570) GBp
HSBC upgrades TotalEnergies to Buy (Hold) – target 93 (80) EUR

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