EUROPEAN EQUITIES UPDATE: Stocks build on yesterday's gains ahead of German debt reform vote

STOXX 600: +0.7%

• European bourses opened on the front foot in an extension of the gains seen on Monday. Broad macro newsflow for the Eurozone has been on the light side. In Germany, markets are awaiting the outcome of the vote in the Bundestag on the debt reform package. The bill is widely expected to pass given the parliamentary arithmetic favouring CDU/CSU, SPD and Greens. From a data perspective, German ZEW data showed a greater-than-expected improvement in economic sentiment amid fiscal hopes.


• Overnight, APAC stocks were mostly higher after the advances on Wall Street and with light catalysts heading into this week's central bank announcements, although some of the gains were capped as Israel resumed its bombardment of Gaza.


• Note, aside from the German vote, today's European docket is particularly thin.

Sectors: Mostly Positive

• European bourses hold a mostly positive bias with breadth increasing since the open.


• Tech is top of the leaderboard ahead of NVIDIA CEO Huang's appearance at the 2025 GTC event. It's also worth noting that tech was underpinned in APAC trade after the recent launch of Baidu's AI reasoning model launch. Autos are also on the front foot with Volkswagen (+1.5%) underpinned after news that Audi is to cut 7.5k jobs within Germany by 2029; measures will save EUR 1bln/year over the medium term. Banks are also higher on the session alongside the pick-up in yields.


• To the downside, the yield effect is acting as a drag on the real estate sector, with other laggards including Media and Personal Care, Drug and Grocery names.

DAX 40 +1.3%, FTSE 100 +0.5%, CAC 40 +0.6%, FTSE MIB +0.9%, IBEX 35 +1.1%, SMI +0.4%

• DAX is the regional outperformer with some of the budget beneficiaries such as Thyssenkrupp (+6.2%) near the top of the Stoxx 600. Siltronic (+6.4%) is the best performer in the index alongside the encouraging tone in the tech sector. Elsewhere in German corporate newsflow, Rheinmetall (+0.8%) shares are marginally lagging the broader index after the Co.'s Supervisory Board Chairman sold shares in the Co.


• Anglo American (+2.1%) has been underpinned following a broker upgrade at RBC. BT (+1.1%) shares have been supported by source reporting in the FT that Sunil Bharti Mittal has reportedly indicated that he is looking into increasing his holding in the Co. Elsewhere in the UK, Deliveroo (+1.3%) shares have been bolstered by the Co.'s decision to extend its share buyback to GBP 250mln.


• Broker action has weighed on the likes of Iberdrola (-0.4%) and Rubis (-3.5%) with stock-specific newsflow otherwise light across the region.

US Equity Futures: ES -0.2%, NQ -0.4%, YM -0.1%, RTY -0.4%

• Futures are a touch softer count down to the afternoon's data docket where the latest import/export price data which will feed into both AtlantaFed and PCE. More broadly, the macro focus is on the Putin-Trump call which is set for between 13:00-15:00GMT and then the FOMC on Wednesday.


• ES and NQ are yet to deviate from relatively thin overnight parameters and, so far at least, have not been affected by a handful of equity specifics: Alphabet (+0.2%) in talks to purchase Wiz for USD 30bln, Tesla (-0.4%) softer as Toronto has excluded it from an incentive program due to US-Canada tensions, Walmart (+0.2%) CEO to sell shares and NVIDIA's (+0.5%) CEO to speak at 17:00GMT/13:00EDT.

18 Mar 2025 - 10:20- EquitiesEU Research- Source: Newsquawk