EUROPEAN EQUITY UPDATE: Meta gets the better of global equity markets

Analysis details (09:39)

European equities (Stoxx 600 -0.5%) trade on the backfoot as the Meta-inspired after-hours slump in US futures dampens sentiment in the region ahead of upcoming policy announcements from the BoE and ECB. Meta shares are seen lower by 21% in pre-market trade following Q4 metrics which saw profits, DAUs, MAUs come in on the soft side, while guidance disappointed. As a guide, Meta holds a 4.7% and 2.3% weighting in the NDX and SPX respectively. Accordingly, the NQ future lags peers with losses of 2.0% compared to downside of 0.9% in the ES. From an earnings perspective in the US, highlights include Eli Lilly, Merck, Honeywell, Conocophillips in the pre-market whilst Amazon and Ford are due to report after-hours. In Europe it’s also been an earnings-dominated session with sectors somewhat mixed. To the upside, Energy names are top of the leaderboard amid upside in Shell (+2%) after the company reported a beat on expectations for Q4 adjusted net profits and a hike in its Q1 dividend. In a recent note, Berenberg has believe that value stocks have further room to run, whilst suggesting that energy stocks in Europe and the US continue to look attractive. Elsewhere, Tech names lag peers in sympathy with price action in the US with downside exacerbated by losses in Infineon (-4%) despite the company raising its revenue guidance with some in the market suggesting that the bar to exceed expectations for the sector is particularly high. Health care names are also softer on the session amid downside in Swiss-heavyweight Roche (-2.6%) who are acting as a drag on the SMI after FY21 results offered disappointing sales guidance. Elsewhere, notable highlights include BT (-3.1%) post-9M results and announcing that it has entered into exclusive negotiations with Discovery (DISCA) to create a sports JV. Note, losses for the Telecom sector have been stemmed by Deutsche Telekom (+2.5%) after T-Mobile US (in which it holds a 47% stake in the company) reported earnings after the closing bell yesterday. Finally, focus for the Eurozone banking sector has focused on poorly received Q4 results from ING (-4.2%) and BBVA (-3.6%) ahead of the ECB policy announcement at 12:45GMT.

03 Feb 2022 - 09:39- EquitiesExclusive- Source: Newsquawk