Newsquawk Daily European Equity Opening News - 14th October 2024

ASIA

APAC stocks were predominantly higher but with the upside capped amid the Japanese holiday closure, soft Chinese inflation and lack of China stimulus details, while participants await Chinese trade data. ASX 200 was underpinned amid strength in mining stocks despite a pullback in commodity prices. Hang Seng and Shanghai Comp traded mixed in which the former initially slipped back beneath the 21,000 level with notable weakness in tech and consumer stocks after the Chinese Ministry of Finance's press briefing omitted an actual stimulus size. Conversely, the mainland ultimately shrugged off the lack of stimulus details and softer inflation data, while other government departments also pledged support efforts, picking up further throughout the session.

BYD Company (BYDDY) - China's BYD expects to significantly increase its sales in Germany within six months, according to Executive VP Stella Li. The company plans to start producing cars in Hungary by the end of 2025, Reuters reports. Li criticised the upcoming European Union tariffs on Chinese electric vehicles, calling them a loss for consumers. BYD could sell EVs in Germany priced at between EUR 25-30k, the report said.

China Auto Sales - China's passenger vehicle sales rose +4.5% Y/Y in September, reaching 2.1mln units, ending a five-month decline, WSJ reports. The increase is attributed to supportive government policies and improving consumer sentiment, with new-energy vehicles accounting for 53.3% of sales, surpassing internal combustion engine vehicles for three consecutive months. Separately, China again urged the EU to avoid negotiating prices with individual electric vehicle manufacturers, following eight unsuccessful rounds of talks regarding planned tariffs. The EU recently voted to raise tariffs on Chinese EVs to 45%, citing unfair subsidies from Beijing, which China denies and has responded by threatening tariffs on various European products. China's SCMP reports that China has invited EU officials for further discussions on the upcoming tariffs on Chinese electric vehicles, despite nearly three weeks of negotiations yielding no resolution; MOFCOM noted that although "significant progress" has been made in some areas, major differences still persist.

EUROPEAN CLOSES

CLOSES: DAX: +0.75% at 19,356, FTSE 100: +0.19% at 8,254, CAC 40: +0.48% at 7,578, Euro Stoxx 50: +0.68% at 5,004, AEX: +0.51% at 916, IBEX 35: +0.54% at 11,720, FTSE MIB: +0.68% at 34,308, SMI: +0.64% at 12,155, PSI: +1.04% at 6,756.

SECTORS: Industrials 0.86%, IT 0.76%, Utilities 0.74%, Healthcare 0.67%, Financials 0.65%, Materials 0.28%, Consumer Disc 0.28%, Consumer Stpl 0.14%, Energy 0.01%, Telecoms -0.24%

FTSE 100

British Airways (IAG LN) - Co. says they have made further changes to the schedule as they continue to experience delays in the delivery of engines and parts from Rolls-Royce (RR/ LN). Do not believe the issue around engine and parts from Rolls Royce will be solved quickly. (Newswires)

DS Smith (SMDS LN) - International Paper (IP) held a special meeting of shareholders in connection with the proposed acquisition of DS Smith. (Newswires)

UK Economy - UK PM Starmer is to ask the competition watchdog to soften its approach as he vows to rip out bureaucracy to make the UK more attractive for investments, according to the FT. (FT)

OTHER UK COMPANIES

Mulberry (MUL LN) - Frasers (FRAS LN) revised offer terms of 150p/shr, which values Mulberry at GBP 111mln. Mulberry's majority shareholder said it has no interest in selling any of its stake. Mulberry last closed at 113.50p/shr

BROKER MOVES

Bunzl (BNZL LN) upgraded to Overweight from Neutral at JPMorgan

DAX

Commerzbank (CBK GY) - Verdi Union says it would oppose any cross-border merger irrespective of their nationality. (Newswires)

OTHER GERMAN COMPANIES

Fraport (FRA GY) - Total passenger numbers +0.7% Y/Y to 19.4mln passengers in Sept. Cargo volume +3.5% Y/Y in Sept. (Newswires)

BROKER MOVES

CAC

French stocks - Fitch Ratings has downgraded France’s outlook to negative from stable, while maintaining France's credit rating at "AA-", citing increased fiscal deficits and political risks; the agency expects government debt to rise to 118.5% of GDP by 2028, following the announcement of the 2025 budget. (Newswires)

French shipping - CGM CFO says the proposed exceptional tax on shipping represents a "competitive disadvantage" vs rivals, according to Les Echos; adds it will deprive the group of EUR 800mln for investment in the next two years. (Les Echos)

Renault (RNO FP) - The CEO's recent bet on low-cost gearbox tech has allowed the Co. to gain ground in Europe's hybrid car market. (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

PAN EUROPE

China-exposed stocks - Chinese CPI YY (Sep) 0.4% vs. Exp. 0.6% (Prev. 0.6%); PPI YY (Sep) -2.8% vs. Exp. -2.5% (Prev. -1.8%). Elsewhere, China’s Finance Minister Lan Foan said local governments have CNY 2.3tln in local funds to spend in the last three months of the year which includes debt quotas and unused funds. Lan stated that the central government has relatively large room to issue debt and increase the budget deficit, while they will better use policy measures to support the economy.

EU Autos - European carmakers are set to launch numerous affordable EV models in response to stringent EU carbon targets and intense competition from China, amid falling demand and rising inventory levels, FT reports. As the industry braces for an “EV winter,” companies like Renault (RNO FP) are focusing on recovering market share, while others, such as Volkswagen (VOW3 GY) and Stellantis (STLAM IM/STLAP FP), face profit warnings due to challenges in meeting emissions targets. Analysts predict a potential price war, with European manufacturers struggling to compete against Chinese models priced significantly lower.

Eni (ENI IM) - The CEO said nuclear power generation is essential in Europe to decarbonise the economy. (Newswires)

Iberdrola (IBE SM) - Q3 net electricity produced -22.5% Y/Y at 29,974 GWH. Installed capacity at end-Sept. 56,339 MW (prev. 62,102 MW). (Newswires)

UCB (UCB BB) - UCB receives U.S. FDA approval for 320 mg single-injection device presentations of BIMZELX (bimekizumab-bkzx). (UCB)

BROKER MOVES

Galp Energia (GALP PL) initiated with Buy at HSBC

OMV (OMV AV) initiated with Buy at HSBC

SMI

Roche (ROG SW) - Majority of children with spinal muscular atrophy (SMA) treated with Roche’s Evrysdi are able to sit, stand and walk independently, two-year data demonstrate. (Roche)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Aker BP (AKRBP NO) - Q3'24 Trading Update: Equity production averaged 414.7k mobepd. Decrease compared to prev. quarter, primarily due to planned maintenance. (Newswires)

Danish stocks - Morningstar DBRS confirms Denmark at 'AAA'; trend stable. (Newswires)

Kesko (KESKOB FH) - Sales +1.9% in Sept, -2% in comparable terms. (Newswires)

Novo Nordisk (NOVOB DC) - India's generic drugmakers are preparing to introduce affordable weight-loss drugs in the UK, starting with Biocon's generic Saxenda, expected to launch by November, FT reports. The move follows the expiry of Novo Nordisk's patent, sparking predictions of a "huge price war" that could enhance access to these treatments, FT reports. Generic competition is anticipated to significantly reduce market share for original suppliers and lower drug prices by 20-30%. Elsewhere, US FDA is to reconsider its decision barring compounded versions of Eli Lilly's (LLY) weight loss drug. (FT/Newswires)

BROKER MOVES

Equinor (EQNR NO) upgraded to Equalweight from Underweight at Morgan Stanley; maintains European energy with a cautious stance, but analysts note market expectations have "fallen considerably" and cite a tighter gas market for near-term upside.

US

CLOSES: SPX +0.61% at 5,815, NDX +0.15% at 20,272, DJIA +0.97% at 42,864, RUT +2.10% at 2,234

SECTORS: Consumer Discretionary -0.41%, Technology -0.03%, Energy +0.48%, Consumer Staples +0.52%, Communication Services +0.69%, Materials +0.70%, Health +0.73%, Utilities +0.89%, Real Estate +1.06%, Industrials +1.79%, Financials +1.95%.

Boeing (BA) - Boeing plans to cut 17k jobs, about 10% of its workforce, due to deepening losses and a prolonged machinist strike, CNBC reports. The company will delay the launch of its 777X wide-body aircraft to 2026, further exacerbating its challenges. Boeing expects a Q3 loss of USD 9.97/shr (exp. -1.34), with pretax charges of USD 5bln across its commercial and defence units. Additionally, it will cease production of its 767 freighters in 2027. The strike, involving 30k workers, continues to strain Boeing’s operations, burning over USD 1bln monthly. (CNBC)

Taiwan Semiconductor Manufacturing Company (TSM) - Taiwan’s National Science and Technology Council Minister said that TSMC is planning additional chip plants in Europe, focusing on AI chip production, Bloomberg reports. It follows the construction of TSMC's first fab in Dresden, with more fabs being considered for different market sectors, further expanding the company's global presence. (Bloomberg)

14 Oct 2024 - 06:58- Fixed IncomeResearch Sheet- Source: Newsquawk