EUROPEAN EQUITY UPDATE: Stocks perky as attention turns to the BoE

Analysis details (09:38)

• European equities (Eurostoxx 50 +0.7%) trade on the front foot after extending gains seen at the cash open. Fresh fundamental drivers appear to be lacking with no clear catalyst behind the move other than potentially a catch-up play to some of the late gains seen yesterday on Wall St. Going forward, focus for the region will be on events on Threadneedle Street whereby the BoE is expected to raise the Bank Rate by 25bps via a 7-2 vote split; attention thereafter on any indications over potential further tightening.


• APAC stocks were mixed. China reported softer inflation data which supported arguments of a slow economic rebound ahead, while factory gate prices saw deeper deflation. Aussie share markets saw weakness in utilities and commodity sectors overshadowing outperformance in tech and after consumer inflation expectations ticked higher. Japanese shares were indecisive, and the BoJ’s Summary of Opinions provided very little in the way of fresh insight.


• US equity futures are higher in pre-market trade. Today, weekly claims data, PPI, and Fedspeak are the main focus for US traders, while any commentary on the debt ceiling will be looked at.


• Equity sectors in Europe are mostly firmer with Consumer Products & Services, Travel & Leisure and Retail near the top of the leaderboard, whilst Basic Resource names are lagging on account of weakness in underlying metals prices. 


• It has been a busy morning of corporate updates with ING (+3.9%) one of the best performers in the region following strong Q1 earnings and announcement of a EUR 1.5bln share buyback. Tod’s (+3.6%) is benefiting from encouraging Q1 results and helping provide support for LVMH (+1.8%) and Kering (+1.3%) which in turn has prompted some modest outperformance in the CAC 40 (+0.8%) vs. regional peers. A similarly packed start for the Telecom sector with earnings from Deutsche Telekom (+1.2%), Telefonica (-2.3%) and Telecom Italia (-1.5%). German heavyweight Bayer (-7.2%) is near the foot of the Stoxx 600 and acting as a drag on the DAX (+0.2%) after Q1 results fell short of expectations and saw the Co. forecast results at the lower end of previously guided ranges. Other notable earnings laggards include Coloplast (-8%), ITV (-5.1%), Swiss Life (-3.5%), ThyssenKrupp (-3.5%) and Aurubis (-2.5%).

11 May 2023 - 09:38- Research Sheet- Source: Newsquawk