EUROPEAN EQUITY UPDATE: Stocks in Europe shrug off Monday blues as markets await Ukraine/Russia peace talks

Analysis details (09:41)

European equities (Eurostoxx 50 +1.1%) have kicked the week off on the front foot after extending on gains seen at the cash open with little in the way of fresh fundamentals coinciding with the move. The APAC lead was predominantly a soft one as the Nikkei 225 snapped its 9-day win streak and concerns mounted in China after Shanghai announced a four-day lockdown of its financial district and nine other areas. From a geopolitical perspective, aside from the fallout from the White House walking back “off-script” comments from US President Biden about regime change in Russia, focus will be on the latest round of discussions between Ukraine and Russia. Talks are set to commence today in Istanbul and run until Wednesday, ahead of which, Ukraine President Zelensky stated that Ukraine is ready to discuss neutrality and non-nuclear status if backed by security guarantees, while he added that a deal is only possible with a troop withdrawal. More recently, a Ukrainian Interior Ministry Advisor has tempered expectations for the talks but stated that he expects no major breakthrough at peace discussions. US futures (ES -0.4%) lag their European counterparts following a mixed close on Friday as focus for the US remains on advances in US yields with the 5yr/30yr yield curve inverting for the first time since 2006 ahead of this week's jobs report and PCE data. Sectors in Europe are mostly firmer with Banks top of the leaderboard amid the increasingly favourable yield environment in the region and as markets now price in four 25bp hikes by the ECB over the course of the next 12 months. Elsewhere, insurance names and autos are also amongst the best performers. To the downside, Tech names are modestly softer with Apple lower by 1.4% in pre-market trade following reports in the Nikkei that the Co. is reducing iPhone and Airpods output amid Ukraine war uncertainty. In terms of individual movers, BASF (+3.9%) are one of the top performers in the Stoxx 600 with HSBC upgrading the company to buy from hold, whilst Telecom Italia (+2.3%) have been supported throughout the session as the Co. continues to be the subject to ongoing PE interest. To the downside, Rolls Royce (-10.8%) is pulling back from a stellar performance on Friday after shares were bolstered by reports in Betaville suggesting the Co. is about to be involved in a significant corporate transaction with an unidentified suitor.

28 Mar 2022 - 09:41- EquitiesImportant- Source: Newsquawk