EUROPEAN EQUITY UPDATE: Risk-on trade as UK participants return though the docket is light, ex-UK, amid Pentecost

Analysis details (09:35)

European bourses opened the session on the front foot, Euro Stoxx 50 +1.1%, extending incrementally on the indication from futures after a somewhat mixed APAC handover. The tenor of APAC newsflow was mixed, as participants were caught between ongoing improvements in the Beijing COVID situation and increases to the Chinese Caixin PMIs; albeit, the data points remains in contractionary territory. Additionally, geopolitics have drawn noted focus with North Korea continuing to up-the-ante with fresh missile launches while China, Australia and later Canada had tensions re. jet activity over the weekend. Returning to the morning’s price action and the FTSE 100 +1.2% is the modest outperformer as it catches up from the macro developments/stock specifics of the long bank holiday. Though, gains in the bourses are fairly broad-based with newsflow thin and the morning’s action is seemingly more of a modest risk-on move after the pressure seen on Friday, with newsflow particularly thin so far. Note, UK PM Johnson will face a no-confidence vote today between 18:00-20:00BST, with a majority (180 MPs) of the party required to oust him after at least 54MPs submitted no-confidence letters in the PM. Results will be counted immediately though the announcement time is TBC at the time of writing. Turning to sectoral performance, they are unsurprisingly almost all in the green with just Telecom names slightly softer. At the top end are Basic Resources amid outsized gains in base metals, LME Copper +2.2% for instance, as China returns from Dragon Boat Day and with the domestic COVID situation continuing to improve; Luxury names also deriving support from such developments. Individual movers are being lifted on the broader tone, though the likes of AstraZeneca, -2.3%, are failing to benefit amid drug updates while BT, -1.5%, is pressured amid broader sectoral performance and as they have been ordered to improve rural connections. 

06 Jun 2022 - 09:35- MetalsResearch Sheet- Source: Newsquawk