EUROPEAN EQUITY UPDATE: Stocks continue slipping as gas prices rise and the Jackson Hole Symposium looms

Analysis details (09:55)

Equities in Europe kicked off the week on the back foot in a continuation of the losses experienced on Friday, with added jitters in the region as Russia announced three-day maintenance to Nord Stream 1. Overnight, Asia-Pac stocks were mostly lower amid headwinds from global inflationary concerns and further power restrictions in China, while participants also digested the latest PBoC rate actions where it asymmetrically lowered LPR rates following cuts to the MLF and RRP rates last week, as policymakers attempt to support the economy after weak July activity data. US equity futures were subdued at the resumption of futures trading, with the contracts extending on losses as European players entered the fray. In Europe, cash bourses have been grinding lower since the open (Euro Stoxx 50 -2.0%; Stoxx 600 -1.2%). Focus today in Europe is on the surging gas prices on news that Russia’s Gazprom will shut down the Nord Stream 1 pipeline for three days at the end of the month to conduct unscheduled maintenance. ING said “the real concern for the market is whether flows will resume after this period. Gazprom has said that once this work is complete, flows will return to 20% of capacity, which would be unchanged from current levels.” Uniper shares have been hit by this and sit at the foot of the Stoxx 600 with losses in excess of 10%. Sectors in Europe are all lower and portray a defensive bias as losses are relatively cushioned in Healthcare, Telecoms, Food & Beverage, Utilities, and Personal care, whilst deeper losses are seen across Tech, Banks, and Autos & Parts. In equity-specific news, GlaxoSmithKline (+0.2%) and Sanofi (+0.3%) are setting their sights on ending the dominance of BioNTech/Pfizer and Moderna vaccines after early data showed their shot had fewer side effects and lasted longer, according to GSK’s new vaccine chief, via the FT. In M&A, Vodafone (-0.4%) is to sell its Hungarian unit for around EUR 1.8bln. Cineworld (+6%) attempts to trim some of last week’s dire losses after the Co. and Regal Theaters said they are globally open for business as normal and are evaluating strategic options, although options include voluntarily Chapter 11 in the US. Finally, French supermarket Carrefour (-1.9%) is freezing prices on 100 essential products until November 30th to help domestic customers cope with the rising cost of living.

22 Aug 2022 - 09:55- EquitiesResearch Sheet- Source: Newsquawk