European equities whipsawed this week as the Iran conflict drove sentiment, with research turning more constructive late in the week on hopes of de-escalation.
Early in the week, analysts flagged a risk-off open, with futures pointing to losses of around 1.5% and the DAX threatening to slip below 24,500. Sentiment data cited by researchers showed European equity flows in the bottom decile and investors meaningfully underweight the region. Airlines including Lufthansa were singled out as vulnerable after lowered industry profit forecasts tied to kerosene prices.
By Thursday and Friday, the published consensus shifted more positive: commentary pointed to peace hopes lifting the DAX back above 24,000, while strategists argued lighter positioning and pent-up flows beyond AI themes set Europe up to outperform the US tactically, with consumer and luxury names flagged.
Structurally, researchers remained bullish on European tech sovereignty plays — semis, software, telecoms and network equipment — citing the €43bn Chips Act. A more cautious thread warned on food staples margins. Hugo Boss jumped on a €38 Frasers offer.