EUROPEAN EQUITY OPEN: Stocks slip after the open; Russia/Ukraine and China COVID situation cited

INDICES: At 08:12GMT, Euro Stoxx 50 -1.1%, FTSE 100 -1.3%, DAX 40 -1.2%, CAC 40 -1.1%, FTSE MIB -0.8%, IBEX 35 -0.9%, SMI -0.8%.

OPEN: European equities fell at the start of Tuesday trading, with traders citing the slowing process in peace talks between Russia and Ukraine (reports in pre-market trade noted that Russia had taken the Kherson region of Ukraine, where a key Black Sea port is located). Additionally, the deteriorating COVID situation in China is also gaining more attention, and Chinese stocks retreated overnight again despite (backwards-looking) activity data for January which broadly topped expectations. UK labour market data released this morning was mixed, but does little to change the BoE narrative (expected to hike +25bps on Thursday). Today’s agenda will again feature Russia/Ukraine talks; in data releases, the March ZEW out of Germany might be easy to look through given the current ongoing Ukraine situation; in the US, monthly Empire Fed data and PPI data are the highlights; in central banks, the ECB weekly asset purchases data is due, while ECB President Lagarde will deliver some comments in the afternoon. After hours, the API releases weekly energy inventory data. Full Day Ahead here.

STOCK SPECIFICS: In deal news, Rio Tinto (RIO LN) wants to buy out minority shareholders in Mongolian copper miner Turquoise Hill Resources for USD 2.7bln. In Russia-related updates, Imperial Brands (IMB LN) cut FY net revenue growth outlook due to the hit from the exit of Russian assets; Equinor (EQNR NO) will stop trading in Russian oil and oil products; RWE (RWE GY) warned of major business risks if the Ukraine war escalates. In corporate updates, Volkswagen (VOW GY) returned to profitability in North America, and has achieved a 16% market share in China. Fraport (FRA GY) revenues and profit were boosted by higher passenger demand and cost reductions; Wacker Chemie (WCH GY) - outlook was better than expected. Generali (G IM) posted record profits last year. H&M (HMB SS) results topped expectations as it reduced markdowns. In broker updates, HeidelbergCement (GEI GY) downgraded at Morgan Stanley, Zalando (ZAL GY) upgraded at Exane, EssilorLuxottica (EL FP) upgraded at SocGen.

NOTABLE MOVERS:

• Ferguson (FERG LN) +6.9%: Results.


• Wacker Chemie (WCH GY) +3.3%: Results, outlook.


• BP (BP/ LN) -3.0%: Brent, WTI down USD 5.78-6.10.


• Shell (RDSA LN) -3.0%: Brent, WTI down USD 5.78-6.10.


• Swedish Match (SWMA SS) -5.6%: Suspends cigar business spin-off.


• Fraport (FRA GY) -6.1%: Results, guidance.


• Prosus (PRX NA) -6.5%: Tencent (TCEHY) facing record fine.

Our full European equity briefings for March 15th can be accessed here and here.

15 Mar 2022 - 08:13- EquitiesData- Source: Newsquawk