EUROPEAN EQUITIES UPDATE: Stocks higher following yesterday's solid showing on Wall Street

STOXX 600: +0.4%

• European bourses looked primed for a softer cash open. However, an early pick-up in futures has helped underpin price action thus far. At the time there was no obvious catalyst for the move and instead it looked to be more a case of Europe buying up risk after the moves seen on Wall Street yesterday.


• From a fundamental perspective, focus remains on the trade agenda after reports that US President Trump will announce additional tariffs over the next few days on autos, lumber and chips. He added that he may give "a lot" of countries breaks on tariffs.


• From a data perspective, German Ifo data showed an improvement from the prior with commentary noting GDP could grow around 0.2% in Q1. However, incoming orders and demand are still slow.


• On the speaker slate, rhetoric from the ECB thus far has seen comments from ECB's Muller that rates are not restricting the economy, whilst tariffs are likely to mean faster inflation in the short term. ECB's Kazimir says "services inflation is key", adding that he is open to discussing a rate cut or pause in April

Sectors: Mostly Positive

• Sectors are mostly positive with energy names top of the leaderboard alongside recent upside in the energy complex. Shell (+1.9%) is a key mover within the sector after noting that it is to lower costs and reduce clean energy investments in an attempt to increase shareholder distributions. Elsewhere, the favourable rate environment is acting as a source of support for Banking and Insurance names.


• To the downside, Retail is the clear laggard following poorly-received FY results from Kingfisher (-10.9%) which has sent their shares to the bottom of the Stoxx 600.

DAX 40 +0.4%, FTSE 100 +0.4%, CAC 40 +0.7%, FTSE MIB +0.8%, IBEX 35 +0.8%, SMI +0.2%

• In terms of individual movers within the region, equity newsflow has been relatively sparse. Baloise Holdings (+6.2%) is the best performer in the Stoxx 600 after announcing a CHF 100mln buyback alongside FY results. Bayer (+4.1%) is another notable gainer as it looks to bounce back from yesterday's Roundup-induced losses. THG (+2.6%) shares are on the move higher after unveiling fundraising efforts.


• To the downside, Kuehne & Nagel (-4.2%) shares were nudged lower after disappointing FY25 guidance. HSBC (-0.4%) has been in focus after Bloomberg reported that the Co. intends to double down in Asia and the Middle East following its exit from business areas in Europe and the US.

US Equity Futures: ES -0.1%, NQ -0.3%, YM -0.1%, RTY -0.5%

• Despite the strength seen in Europe, US futures find themselves in the red. However, this is only modest in nature as it stands with the benchmarks at the top-end of yesterday’s parameters and as such holding onto the bulk of Monday’s gains.


• Pressure which comes in a slight easing from this, and also potentially as Trump’s tariff language exerts influence after he said they are to announce additional tariffs over the next few days on autos, lumber and chips. However, on a more positive note, POTUS added they may give "a lot" of countries breaks on tariffs. For China specifically, the White House confirmed that the Venezuela-related measures will apply to China and as such their tariff level will hit 45%.


• In specifics, EU is to fine Meta EUR 1bln (-0.1%); Alibaba (-2.2%) Chair warns on AI data centres; Tesla’s (-0.7%) Europe sales plummet; Boeing (U/C) seeks to withdraw 737 Max guilty plea; KBH (-7.7%) drops after earnings & guidance; CCI (-1.2%) fires its CEO.

25 Mar 2025 - 10:05- ForexEU Research- Source: Newsquawk