EUROPEAN EQUITY OPEN: Indices rise in relief at the start of Wednesday trade

INDICES: At 08:14GMT, Euro Stoxx 50 +3.8%, FTSE 100 +2.1%, DAX 40 +4.0%, CAC 40 +3.7%, FTSE MIB +3.8%, IBEX 35 +3.4%, SMI +2.0%.

OPEN: European equity futures started the day on the front-foot. Traders noted Tuesday’s announcement of ‘massive’ EU joint debt issuance to finance energy and defence spending, and also news that Europe was not participating in the US ban on the import of Russian energy, and is instead taking a more medium/long-term view to reduce dependency on Russian energy. This has eased fears (a little) on the potential demand destruction that can be wrought by higher prices, which have been surging in wake of the pandemic and exacerbated by the recent geopolitical tensions. Ahead of Thursday’s ECB meeting (our preview here), traders will also be on the look out for any ‘sources’ reports giving insight into policymakers’ thinking; they are expected to be more patient in normalisation efforts amid risks of stagflation posed by a lower growth impulse (as surging energy prices weigh on consumers’ real incomes) amid higher prices. Geopolitical headlines will dictate the macro mood; Thursday's meeting between the Ukrain/Russia Foreign Ministers also comes into view. Full Day Ahead here. 

STOCK SPECIFICS: In terms of the Russia highlights, UniCredit (UCG IM) noted limited exposure, and combined with the updates from Societe Generale (GLE FP) and Credit Agricole (ACA FP), it is easing some fears of overexposure of the European banking sector to Russia; Unilever (ULVR LN) suspends all Russian imports and exports. In deal news, Vodafone (VOD LN) is to sell its 21% stake in Indus Towers. In consumer discretionary, Adidas (ADS GY) raised FY21 dividend by 10% and guided FY22 sales above street forecasts; Salvatore Ferragamo's (SFER IM) results were also welcomed by investors. In industrials, Deutsche Post (DPW GY) topped sales expectations, raised dividend and announced a share buyback; Airbus (AIR FP) latest delivery numbers have been cheered by investors.

NOTABLE MOVERS:

• Adidas (ADS GY) +7.5%: Results, dividend, guidance.


• Siltronic (WAF GY) +7.4%: Results.


• Deutsche Lufthansa (LHA GY) +7.2%: Reprieve after recent downside.


• Accor (AC FP) +6.5%: PT raised at Berenberg.


• Elis (ELIS FP) +6.4%: Results.


• Brenntag (BNR GY) +5.3%: Results.


• Vodafone (VOD LN) +5%: Selling Towers stake


• Deutsche Post (DPW GY) +4.5%: Results.


• Rio Tinto (RIO LN) -0.4%: Profit-taking after recent upside, downgrade at Citi.

NOTE: Our full European equity briefings for March 9th can be accessed here and here.

09 Mar 2022 - 08:14- EnergyResearch Sheet- Source: Newsquawk