EUROPEAN EQUITY UPDATE: Stocks fade yesterday's Russia/Ukraine optimism whilst CPI metrics focus minds

Analysis details (09:16)

European equities have kicked the session off on the backfoot (Eurostoxx 50 -1%) as markets reflect on yesterday’s peace talks between Russia and Ukraine. The immediate take on discussions was a positive one as shown by the price action during Tuesday’s session, however, since then, commentary from the West has adopted a more sceptical tone with a US official stating the US believes any movement of Russian forces from around Kyiv is a "redeployment, not a withdrawal" and said the world should be prepared for a continuation of major offensives in other areas in Ukraine as Russia is shifting gears. Furthermore, Ukrainian President Zelenskiy said they see no reason to trust words from "certain representatives of a power that continues to fight for our destruction". US futures trade on a softer footing but to a lesser extent than European counterparts with the ES -0.2% and NQ -0.3% with focus from a US perspective falling on the ADP release at 13:15BST/08:15EDT ahead of NFP on Friday and another round of Fed speak with Bostic, Barkin and George all due on the docket. Sectors in Europe are predominantly softer with Energy names a clear outlier to the upside with gains in excess of 2% as crude benchmarks continue to attempt to claw back some of the lost ground seen during yesterday’s session and as geopolitics remains a guiding force for the complex. Basic Resources are also benefiting from a pick-up in metals prices with Anglo American (+3.7%), Glencore (+3.2%) and Rio Tinto (+2.7%) driving outperformance in the FTSE 100 (+0.2%). To the downside, there is broad weakness in Auto names with Renault (-3.2%) a laggard on account of a report by Bloomberg that it is considering transferring the ownership of Avtovaz to a local investor. Continental (-3.2%) is also seeing selling pressure following a Reuters report noting that Indian antitrust officials have raided offices of Continental, CEAT and Apollo as part of an alleged competition violation case. Elsewhere, it’s been another session of losses for Barclays (-1.4%) with the Co. halting the sale of new retail structured products in the US amid an investigation by regulators over a USD 15bln trading error. Competitor Lloyds (-2.8%) is also underperforming on account of a double downgrade at RBC with the Canadian Bank of the view that UK banks have typically underperformed the market during rate-hike cycles.

30 Mar 2022 - 09:17- EnergyData- Source: Newswires