BP shares listed in New York advanced on Wednesday after the Wall Street Journal reported that the Dutch oil group Shell had begun talks to buy out its British rival. According to the American daily, representatives of the two companies are currently ‘actively’ discussing the possibility of a merger to enable Shell to better compete with rivals such as Exxon Mobil and Chevron. Shell currently has a market capitalisation of some $209 billion, compared with less than $83 billion for BP. A Shell-BP deal would be the latest in a wave of M&A activity across the energy landscape as the producers look to achieve greater economies of scale. However, a spokesperson for Shell said that “no talks are taking place.” Chevron is still working to close its $53 billion megadeal for Hess, which has been held up due to Exxon’s effort to challenge the deal’s legality. Exxon last year closed a $60 billion deal to buy Pioneer Natural Resources. Diamondback Energy sealed a $26 billion deal for Endeavor Energy Resources to bolster its position in the Permian Basin.

The Swiss stock market gave back almost all of its gains from the previous day on Wednesday, when news of a ceasefire had put investors in a buying mood. The SMI lost 0.9 per cent to 11,880 points. Of the 20 SMI stocks, there were 13 losers and 7 gainers. A total of 18.99 million shares were traded (Tuesday: 23.44 million). Holcim confirmed the previous day's almost 7 per cent increase with a further rise of 1.0 per cent, making it the SMI winner of the day. The building materials manufacturer's shares have been traded ‘ex Amrize’ since Monday. The US business was bundled under the name Amrize. The Amrize share is listed separately on the Zurich stock exchange as well as in the USA. Some analysts were positive about Holcim's prospects after the spin-off. However, Amrize dropped by 4.0 per cent after the share price had also risen sharply the previous day. The heavyweight Nestlé was at the bottom of the table with a sharp decline of 2.7 per cent, which was a major drag on the SMI. Givaudan lost 1.9 per cent and Sika 2.0 per cent. Novartis shed 0.4 per cent. The fact that the pharmaceutical giant has now completed the takeover of Regulus Therapeutics did not provide any impetus. Regulus will now become an indirect wholly-owned subsidiary of Novartis, according to a company announcement. Meanwhile, the rating agency Fitch confirmed the ‘AA’ rating of Novartis. The outlook is stable.

Europe
The European stock markets closed lower on Wednesday despite starting the day in positive territory, with geopolitical uncertainties remaining the focus of attention. The Stoxx Europe 600 index lost 0.7% to 537.07 points. In Paris, the CAC 40 and the SBF 120 fell by 0.8% to 7,558.16 points and 0.7% to 5,750.96 points respectively, while the FTSE 100 shed 0.5% in London. The DAX 40 dropped by 0.6% in Frankfurt. WORLDLINE (-38.3%): the group is said to have made payments on behalf of dubious online retailers over the last ten years, according to the Belgian newspaper Le Soir, citing an investigation carried out by over twenty international media. CLARIANE (+10.2%): the operator of retirement homes and clinics has completed a €400 million unsecured bond issue, enabling it to take a further step in its debt reduction strategy. STELLANTIS (+3.1%): Jefferies raised its recommendation on the car manufacturer's shares from “hold” to “buy”, while simultaneously lifting its target price from €9 to €11.50.

United States
With the Israel-Iran cease-fire holding, stocks hung near record levels on Wednesday. Major indexes finished mixed. The S&P 500 was unchanged and Nasdaq Composite edged up 0.3%, leaving both within 1% of their all-time highs. The Dow Jones Industrial Average fell 0.2%, or around 107 points, to 42982. Tech stocks shone, with Nvidia gaining 4.3% to notch its first record close since early January and retaking the title of largest company by market size, ahead of Microsoft. Big tech companies helped lead the rebound from the lows of April’s tariff-fueled market meltdown, and their rapid recovery has some investors piling back in. Oil prices nudged higher, suggesting the selloff of the past three sessions could have overshot. While the Israel-Iran truce appears fragile, analysts say moves in oil futures are likely to stay subdued - as long as neither side attacks energy-export infrastructure or disrupts shipping through the Strait of Hormuz. The moves came while Federal Reserve Chair Jerome Powell gave his second day of testimony on Capitol Hill. Bets on a July interest-rate cut have risen modestly in recent days, after two Fed officials signalled they were open to the possibility. Powell has said recent economic data would likely have justified cutting, were it not for concerns higher tariffs might fuel price rises. President Trump said Wednesday he is reviewing candidates to succeed Powell once his term ends, as the two men clash over monetary policy. Investors have also been encouraged by the race to secure trade deals with the U.S. ahead of looming tariff hikes. Canada’s new lead negotiator, Kirsten Hillman, said U.S. and Canadian officials would meet three times this week to hash out an agreement. Ottawa wants the U.S. to back down from levies on steel, aluminum and autos. The European Union is also rushing to clinch a deal. But the bloc will launch retaliatory levies if the U.S. opts for even baseline tariffs on its goods, the bloc’s industry chief warned, according to a Bloomberg News report. FedEx stock dropped after the delivery company said it expects a $170 million hit from a change in tariff rules that crushed demand for packages from China.

Asia
Asian indexes diverged for the Thursday trading session. While the Nikkei in Tokyo gained 1.4 per cent, the Kospi in Seoul dropped by 1.2 per cent. The other stock exchanges also showed a mixed trend, albeit within narrow limits. Technology stocks are trending firmly. In Tokyo, chip and technology stocks therefore lead the list of winners. Softbank Group rose by 4.6 per cent, Advantest gained 4.3 per cent and Kioxia Holdings climbed 1.9 per cent. SK Hynix bucked the weak trend in Seoul, rising 2.8 per cent.

Bonds
Ten-year and two-year U.S. government debt yields fell on Wednesday, as the odds of a rate cut by the Fed reached 25%, up from 13% a week earlier, according to CME data. A hold remains the highest bet. The 10-year Treasury note yield declined marginally to 4.29%.

Analysis
Price target Richemont: JPMorgan downgrades to CHF 178 (180) - Overweight
Price target SGS: Jefferies slashes to CHF 90 (98) - Hold
Price target Lonza: Goldman Sachs cuts to CHF 650 (660) - Buy