EUROPEAN EQUITY UPDATE: Stocks supported as tailwinds from Wall Street reverberate heading into month/quarter/HY-end

Analysis details (10:04)

Europe is kicking off the week on the front-foot as global equities see tailwinds from Wall Street’s bounce on Friday heading into month/quarter/HY-end and with weekend newsflow lacking any major headwinds – the mood is also supported by further easing of COVID restrictions in China’s Shanghai and Beijing. However, G7 leaders are meeting today to attempt to iron out another sanctions package against Russia – with focus on the proposed oil price cap and ban on Russian gold imports. Nonetheless, US equity futures track sentiment higher – with the NQ (+0.6%) the current outperformer vs the ES (+0.4%), YM (+0.5%) and RTY (+0.4%). In terms of commentary, JPM’s equities-bull Marko Kolanovic (in a note released on Friday) called for a 7% rise in stocks this week amid portfolio rebalancing from pension and sovereign wealth funds – and the rebalancing “could wield an outsize influence on stock prices in the current period of poor liquidity, which is now five times lower than the historical average”, according to JPM. ING also suggests the quarter/HY-end could help equities whilst softening the Dollar this week. Back to the session, European equities have extended the modest gains seen at the open (Euro Stoxx 50 +1.0%; Stoxx 600 +0.7%), with the AEX (+1.7%) the outperformer as the index is bolstered by Prosus (+13%) after the Co. announced the sale of JD (ADS +4.8% pre-market) and Tencent shares to fund a buyback – with Prosus accounting for 5.5% of the AEX by weight. Sectors in Europe are mostly positive – but Utilities and Insurance are subdued, with the overall picture being a cyclical one. Basic Resources outperform following the recent sectoral rout, with Tech a close second. In terms of individual movers, billionaire investor Leonardo Del Vecchio has passed away – he was the Chairman of EssilorLuxottica (Unch), the largest shareholder in Mediobanca (-3.3%), and held just under a 10% stake in Generali (-2.7%).

27 Jun 2022 - 10:04- EquitiesResearch Sheet- Source: Newsquawk