EUROPEAN EQUITIES UPDATE: European stocks gain, Shipping names cruise amid heightened geopolitical tensions

STOXX 600: +0.3%

• European bourses opened mixed, and traded indecisively on either side of the unchanged mark; though sentiment gradually picked up as the morning progressed. More recently, price action has been a little choppy but still remains modestly firmer.


• Overnight, APAC stocks began the week on the front foot following last Friday's resurgence on Wall St and amid encouraging Chinese activity data but with gains capped owing to geopolitical tensions after the US conducted strikes on Yemen's Houthis and with participants awaiting this week's central bank decisions.


• EZ-specific docket is very thin for the remainder of the day; focus will ultimately be on US Retail Sales, but commentary from ECB President Lagarde is due thereafter.

Sectors: Positive

• European sectors hold a positive bias, but with the breadth of the market fairly narrow.


• Energy takes the top spot, lifted by underlying strength in oil prices; the complex is buoyed by heightened geopolitical tensions after the US struck Houthi targets. On that, the militant group said it would continue naval operations until the Gaza blockade is lifted and aid is let in – shipping giant Maersk (+1.8%) steers higher.


• Basic Resources benefits from the risk tone, and after constructive Chinese activity data overnight, with particular focus on the stronger-than-expected Industrial Production data.


• Whilst the Chinese data managed to benefit mining names, it has failed to lift Luxury names in Europe; retail sales data printed in-line with expectations. The country also unveiled a special action plan to boost consumption, but again, has failed to lift sentiment for the sector. LVMH (-0.5%), Hermes (-1.4%).

Others: FTSE 100 +0.1%, DAX 40 +0.4%

• The FTSE 100 is incrementally firmer, with gains in-fitting with peers. Phoenix (+6.7%) tops the pile after it reported strong FY results; elsewhere, mining names are generally in the green, benefiting from the stronger-than-expected Chinese industrial data overnight. AstraZeneca (-0.9%) is a little lower today after it was announced that the co. is set to acquire EsoBiotec for USD 1bln. UK grocery names populate the bottom of the index; as a reminder, on Friday, the sector was hit after Asda warned of softer profits and seeks to cut prices – the likes of Sainsbury’s (-3%) and Marks & Spencer (-2.5%) continues to extend on Friday's losses. It can be noted that JP Morgan wrote that the recent pressure offers a buying opportunity in the short/mid-term, given strong fundamentals for the likes of Tesco / Sainsbury’s.


• The DAX 40 is outperforming in Europe today, and sits firmly above the 23k mark; German auto names are generally higher today, given the risk tone and lack of tariff related updates. For Volkswagen (+1.2%) specifically, Porsche SE (+1.6%), said it is not considering selling any voting shares in the carmaker.

US Equity Futures: ES -0.5%, NQ -0.5%, RTY -0.7%

• Futures are lower across the board, with slight underperformance in the RTY, giving back some of the significant strength seen on Wall Street on Friday.


• The US Day sees the release of February retail sales data. The Empire Fed manufacturing survey will be eyed to help form expectations of what the ISM manufacturing survey will look like (when it is released on April 1st); the NY Fed survey is expected to slip to -0.75 in March from +5.7 in February. Elsewhere, the Business Inventories data for January is expected to rise 0.3% M/M (from a prior -0.2%); in wake of the data, the Atlanta Fed will update its GDPnow tracking estimate for Q1, which is currently modelling growth of -2.4%.

17 Mar 2025 - 09:55- ForexData- Source: Newsquawk