EUROPEAN EQUITIES UPDATE: Indices hold a negative bias, Airlines grounded with Heathrow closed

STOXX 600: -0.8%

• European bourses opened lower despite a mixed session in APAC trade. The pressure accelerated throughout the morning, but has since stabilised a touch in recent trade; as it stands, indices reside just off worst levels.


• There is no clear driver for the pressure today, but does come on Quad Witching day; some will also point towards an unwinding of the US to Europe trade, which has led to some outperformance in European assets in the past few weeks.


• With the docket fairly quiet for the remainder of the day (aside from EZ Consumer Confidence), traders will remain laser focused on any tariff updates ahead of the April 2 reciprocal tariff implementation.


• Bloomberg Equity Poll, end-2025: DAX 40: 23029 Euro Stoxx 50: 5536 Stoxx Europe 600: 562 FTSE 100: 8953

Sectors: Negative

• European sectors hold a strong negative bias, with only a couple of industries managing to stay afloat.


• Utilities take the top spot, joined closely by Telecoms; on the latter, BT has reportedly approached AT&T and Orange for a potential international tie-up.


• Travel & Leisure is the underperformer today; the sector has been hit after the UK’s Heathrow Airport announced a complete shutdown due a power outage, caused by a fire. Airliners are broadly lower; IAG (-3%) / Lufthansa (-1.5%). On this, insurance names move a little lower; Allianz (-0.8%), Swiss Re (-0.8%).


• Basic Resources is also towards the foot of the pile given the pressure in the metals complex and amid the subdued risk tone.

Others: DAX 40 -0.6%, FTSE 100 -0.4%, CAC 40 -0.5%

• The DAX 40 is underperforming vs peers, continuing the downside seen in the prior session; losses are broad based today, with no clear individual winner/loser. DHL (-2.2%) is towards the foot of the pile, with the pressure today in tandem with post-earning losses in FedEx; the co. reported a mixed set of results but cut its FY25 guidance. Adidas (-0.6%) also holds a downward bias, in a read across to Nike earnings; the co. beat on headline metrics but highlighted continued consumer sentiment weakness and risks surrounding tariffs.

US Equity Futures: ES -0.3%, NQ -0.3%, RTY -0.5%

• Futures are entirely in the red, with clear underperformance in the RTY, extending on the pressure seen on Thursday. There is no clear driver for the losses today, but comes in tandem with the downbeat mood in Europe and ahead of the looming April 2nd reciprocal tariffs.


• US data docket is light today; speak today comes via Fed’s Williams, Waller and Goolsbee; the former will see the release of a text release and Q&A thereafter. Elsewhere, US President Trump is to speak with Hegseth at 15:00GMT.

21 Mar 2025 - 09:55- EquitiesEU Research- Source: Newsquawk