EUROPEAN EQUITY UPDATE: Stocks continue to struggle for direction

Analysis details (09:35)

• European equities (Eurostoxx -0.2%) trade with little in the way of firm direction following a similar performance yesterday. It’s been a week lacking in major fresh drivers for the region, with markets still awaiting further guidance via data and central bank speak.


• The handover from the APAC region was a mixed one with Chinese participants away from the market and the Nikkei 225 the regional laggard after falling below 28k.


• US equity futures (ES -0.2%, NQ -0.2%, RTY -0.3%) are trading marginally softer following a negative close for the cash markets on Wall St yesterday as value and cyclical sectors led the declines post-JOLTS data. Ahead, the ADP jobs data will help shape expectations for the more widely followed BLS employment situation report, due Friday; the street looks for a cooling in the headline rate of jobs growth to 200k vs 242k last time out (for reference, Friday's official data is expected to see the headline at 240k vs 311k in February). The data follows the February JOLTS data released on Tuesday, which undershot market expectations, and provided some signs that the tightness in the labour market was alleviating. Elsewhere, traders will be paying close attention to the ISM Services data, after the manufacturing equivalent drove a dovish reaction as it came in softer than expectations.


• Equity sectors in Europe are a mixed bag with Utilities top of the leaderboard as Iberdrola (+2%) benefits from an agreement to sell in excess of 8,400 MW of combined cycle gas capacity in Mexico for USD 6bln to Mexico's infrastructure partners. To the downside, Construction & Materials, Industrial Goods and Real Estate lag.


• In terms of individual movers, Sodexo (+9.1%) sits at the top of the Stoxx 600 following well-received H1 results and announcing that it plans to spin off its Benefits & Rewards services during 2024, whilst Direct Line (+4.1%) is another notable gainer following a broker upgrade at Citi. To the downside, Nexans (-6.7%) is markedly lower following a private placement. Finally, UBS has been in focus with the Co. hosting its AGM today, during which, the Chair says it will significantly lower the amount of capital allocated to the investment bank to below 25% of risk-weighted assets, adding that it remains committed to distributing excess capital to shareholders.

05 Apr 2023 - 09:35- EquitiesResearch Sheet- Source: Newsquawk