EUROPEAN EQUITIES UPDATE: Initial sentiment buoyed by Chinese Politburo readout but since faded

STOXX 600: +0.2%

• European bourses began the session entirely in the green, with sentiment in the region lifted following the readout from the Chinese Politburo meeting. On that, it noted that China’s fiscal policy is to be more proactive next year and that monetary policy is to be moderately loose. Since, some indices have given back initial gains and slipped into negative territory.


• The European docket has been light and looks to remain quiet for the remainder of the session; BoE’s Ramsden is due in the afternoon.


• For the Euro Stoxx 50 specifically, traders make note of the Oct 29 high at 5,015 and then the Oct 15 high at 5,084 thereafter, as potential levels of resistance to the upside.

Sectors: Mixed

• European sectors began the European session with a strong positive bias, given the risk-on sentiment vs a current mixed picture.


• Unsurprisingly, the China-exposed sectors top the pile following the Chinese Politburo meeting; Consumer Products topped the pile, followed closely by Basic Resources.


• Real Estate is found at the foot of the pile, weighed on by the relatively high yield environment; Retail follows closely behind alongside losses in Insurance.

European indices CAC 40 +0.4%, FTSE 100 +0.3%, FTSE MIB -0.1%

• The CAC 40 is the marginal European outperformer, with sentiment lifted following the Chinese Politburo meeting (details above). Luxury names take the lion’s share of the gains; Kering (+4.3%), LVMH (+3.3%). As for M&A, Credit Agricole (+0.8%) made a move to protect its business against UniCredit (-1.1%), as it raised its stake in Banco BPM (+2.1%) to around 15% (prev. 9.9%).


• The Chinese inflation metrics overnight printed worse than expected, whilst the PPI components were a little better than feared.


• The heavily commodity-exposed FTSE 100 remains afloat. As expected, mining names like Antofagasta (+3.2%), Glencore (+2.8%) gain; energy names like BP (+1.4%) also benefit from strength in oil prices. WPP (+2.9%) is one of the better performers in the UK today amid reports that Omnicom is in advanced talks to acquire Interpublic; analysts at JP Morgan write that this move might reduce competition for the advertiser. Vodafone (-1.1%) is on the backfoot after the Co. received a downgrade at Goldman Sachs.

US Equity Futures: ES -0.1%, NQ -0.1%, RTY +0.3%

• Futures are mixed vs with the initial readout from the Chinese Politburo meeting sparking some modest upside in the price action; upside which has since faded.


• The US day ahead is fairly quiet, with focus on US Employment Trends, US Wholesale Sales and NY Fed SCE.

09 Dec 2024 - 10:05- EquitiesEU Research- Source: Newsquawk