EUROPEAN EQUITY UPDATE: Stocks subdued in catalyst-thin trade as eyes remain on month-end and geopolitics

Analysis details (10:06)

• European sectors (Eurostoxx50 -0.3%) are on the backfoot continuing the negative handover seen in the APAC session overnight, with clear underperformance in the FTSE100 (-0.5%), largely a function of lower oil prices. Although the equities space initially opened around the unchanged mark, recent pressure in the Fixed complex has weighed on equities. News flow has been light today and the docket is unlikely to pick up materially from a schedule perspective, although upcoming events for Europe include the UK Distributive Trades and a speech from ECB President Lagarde at 14:00 GMT / 09:00 ET.


• European sectors are mixed, with a slight negative tilt, and with the overall breadth of the market fairly narrow. Towards the top of the pile are Telecommunications, Retail and Technology, which opened in the green and have remained strong throughout the session. On the downside, Energy is the major underperformer, underpinned by lower crude prices, whilst Basic Resources also lag due to the broader tentative sentiment in the metals space. In terms of individual movers, the best performer in the Stoxx600, Rightmove (+6.1%) is extending gains, after the Co. provided its trading update and the name also saw a broker upgrade. Within the release, the Co. noted that robust trading continues and raised its FY23 APRA to GBP 112-116mln (prev. 103-105mln). One of the worst-performing stock is JDE Peet’s (-3.6%) after being downgraded to Hold from Buy at Kepler Cheuvreux. Similarly, Entain (-2.8%) and BASF (-2.1%) are both hampered by broker downgrades at Goldman Sachs and Morgan Stanley respectively. Over to French-listed Sanofi (+1.1%), the Co. initially posted marked losses, though reversed course as markets digested news that Dupixent significantly reduced COPD exacerbations in the second positive Phase 3 trial, accelerating FDA submission and confirmed potential to become the first approved biologic for this serious disease.


• Asia-Pac equity markets began the week subdued heading into month-end and after newsflow over the weekend was mainly dominated by geopolitical headlines. ASX 200 (-0.8%) finished lower as weakness in the defensive and mining-related sectors overshadowed the gains in tech, while a quiet calendar added to the humdrum mood. Nikkei 225 (-0.6%) wiped out its opening gains after hitting resistance just above the 33,800 level and as participants digested Japanese Services PPI which showed a slight acceleration. Hang Seng (-0.2%) and Shanghai Comp. (-0.3%) declined following soft Chinese Industrial Profits and amid shadow banking concerns after Chinese authorities opened a probe into struggling shadow bank Zhongzhi, while the PBoC’s notice to strengthen financial support for private companies did little to spur risk sentiment. Later in the session, Reuters reported that the Beijing Stock Exchange implemented a new policy to prevent major shareholders of Co’s from selling stock, amid concerns that sales could extinguish the desired rally.


• US equity futures (ES -0.2%, NQ -0.3%, RTY -0.6%) are trading subdued on the first full session back from the US Thanksgiving Holiday, with clear underperformance in the RTY. The day ahead includes some Tier 2 data scheduled, including US Building Permits, New Home Sales and finally Dallas Fed Manufacturing Business Index. The markets will also take note of two Treasury auctions today (2yr and 5yr). The week ahead is far busier starting from tomorrow, with several Fed speakers scheduled along with Fed Discount Rate Minutes. Looking further out, US PCE Prices and GDP Estimates will be much awaited ahead of Fed’s Powell on Friday.

27 Nov 2023 - 10:06- Fixed IncomeResearch Sheet- Source: Newsquawk