An oil producer from the United Arab Emirates has clinched a $13 billion-plus deal for Germany’s Covestro - a big bet on chemicals as part of its effort to transform into a fully integrated energy company akin to Exxon Mobil and other U.S. majors. Abu Dhabi National Oil Co., or Adnoc, agreed Tuesday to the tie-up, bringing an end to more than a year of talks that had been extended by protracted negotiations over price, job protections for Covestro employees and other matters. The takeover gives Covestro a market value of about 11.7 billion euros, equivalent to about $13.1 billion, making this one of the year’s largest deals. Adnoc is paying 62 euros a share, consistent with the price the energy giant had previously indicated that it was considering. The Wall Street Journal previously reported the deal announcement was expected this week. Covestro gained about 3.75%.

Despite spending much of the day's trading session in positive territory, the Switzerland market ended on a weak note on Tuesday as stocks fell on selling pressure in late afternoon trade amid concerns about escalating tensions in the Middle East.The benchmark SMI ended down 82.21 points or 0.68% at 12,086.66. The index, which touched a high of 12,232.15 about an hour past noon, dropped to a low of 12,060.00 before recovering slightly. Data from the Federal Statistical Office showed Swiss retail sales increased for the second straight month in August, and at a faster-than-expected pace. Retail sales climbed 3.2% on a yearly basis in August, after a 2.9% strong recovery in July. Sales were expected to rise by 2.6%. Sales of food, drinks, and tobacco registered an annual growth of 3.2%, and the non-food sector posted a 2.5% gain. Month-on-month, retail sales rose at a slower pace of 0.4% in August versus a 2.2% increase in July. In nominal terms, retail turnover registered an annual growth of 1.9%, which was the sharpest increase since June 2024. Monthly, sales were up 0.2%. Logitech International ended down 3.55%. Adecco, Richemont and Roche Holding lost 2 to 2.5%. Lindt & Spruengli ended nearly 2% down. Swatch Group ended 1.63% down. Kuehne + Nagel and VAT Group both ended down by about 1.4%. Swiss Re, Givaudan, Sonova, Sika, Geberit, SIG Group and Swiss Life Holding also closed weak.

Europe
European stocks closed lower on Tuesday amid rising tensions in the Middle East with latest reports saying that Iran has launched a ballistic missile attack against Israel. Earlier, Israel said its troops entered southern Lebanon for what it called 'limited' raid but Hezbollah denied they crossed into the territory. The pan European Stoxx 600 ended down 0.38%. Germany's DAX closed down 0.58% and France's CAC 40 dropped 0.81%, while the U.K.'s FTSE 100 climbed 0.48%. Switzerland's SMI ended lower by 0.68%. Among other markets in Europe, Austria, Finland, Greece, Poland, Portugal, Russia, Spain, Sweden and Turkiye closed with sharp to moderate losses. Belgium, Denmark, Iceland and Norway ended higher, while Netherlands closed flat. In the UK market, IAG ended down nearly 5%. EasyJet, ICG, JD Sports Fashion, 3i Group, Barclays, Frasers Group and BT Group closed lower by 2.1 to 3.5%. BT Group, Standard Chartered, Hiscox, IMI, Weir Group, Lloyds Banking Group and Antofagasta also ended notably lower. BAE Systems rallied nearly 3%. In the German market, Henkel, Infineon, Deutsche Post, Adidas, Sartorius and Zalando lost 2 to 3%. Volkswagen ended nealry 2% down. Continental, BMW, Munich RE, Commerzbank, Daimler Truck Holding, BASF, Siemens Healthineers, RWE, Merck and Hannover Rueck also ended notably lower. Rheinmetall climbed more than 5.5%, while Siemens Energy, Vonovia and MTU Aero Engines advanced 2 to 3%. In the French market, LVMH, Renault, STMicroElectronics, Kering, Hermes International, L'Oreal lost 2.5 to 4%.

United States
After moving sharply lower early in the session, stocks regained some ground over the course of the trading day on Tuesday but remained firmly negative. The major averages all moved to the downside on the day, with the tech-heavy Nasdaq leading the way lower. The Nasdaq tumbled 278.81 points or 1.5 percent to 17,910.36, the S&P 500 slumped 53.73 points or 0.9 percent to 5,708.75 and the Dow fell 173.18 points or 0.4 percent to 42,156.97. With the decreases on the day, the Dow and the S&P 500 pulled back off the record closing highs set in the previous session. The weakness on Wall Street came amid escalating tensions in the Middle East after Iran launched a ballistic missile attack against Israel. Semiconductor stocks showed a substantial move to the downside, dragging the Philadelphia Semiconductor Index down by 2.9 percent. Considerable weakness was also visible among computer hardware stocks, as reflected by the 2.6 percent plunge by the NYSE Arca Computer Hardware Index. Boeing and its machinists union haven’t made any progress in recent talks to end a labor strike. If the union holds fast to one of its demands, it will be tough to end the work stoppage soon. Friday night, the International Association of Machinists and Aerospace Workers Local 751 - the main union local representing some 33,000 Boeing employees in the Pacific Northwest - tweeted that talks between the two sides have broken off with little progress, saying “we have no further dates scheduled at this time.” CVS Health has spent more than $88 billion in the past half-dozen years to add a major health insurer, a clinic operator and a home-visit provider to its namesake pharmacies. Now, the healthcare company might break it all up.

Asia
The holiday break on Tuesday did nothing to dampen the buying mood in Hong Kong. The bull market that began last week is continuing at an even faster pace. The HSI continued to rise steeply by around 6 per cent after a whole package of measures to stimulate the Chinese economy was passed in the previous week and at the weekend - especially for the property sector, which has been in crisis for years.

Bonds
In the U.S. bond market, treasuries moved sharply notably amid concerns about escalating tensions in the Middle East. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.9 basis points to 3.743 percent.

Analysis
HSBC raises Swatch target to CHF 200 (170)
Citi lowers Burberry target to 695 (760) p – Trader
UBS lowers Sodexo to EUR 89.50 (93.25) – Buy

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