Newsquawk Daily European Equity Opening News - 17th January 2024

17th January 2024

ASIA

APAC stocks were mostly pressured after the recent upside in yields and tapering of Fed rate cut expectations, while participants also digested mixed Chinese economic releases including GDP and activity data.ASX 200 declined as losses in the commodity-related sectors overshadowed the gains in defence and tech. Nikkei 225 was initially boosted at the open on the back of a weaker currency and briefly climbed back above 36,000 but then pulled back from fresh three-decade highs and wiped out all of its gains as it succumbed to the risk-off mood. Hang Seng and Shanghai Comp retreated amid the mixed data releases from China and Hong Kong significantly underperforming amid hefty losses in tech and property, with the latter pressured by the decline in Chinese home prices.

Chinese Property Names - China Stats Bureau said China's economy is at a crucial stage of recovery and its property market is showing some positive changes, adding there is still relatively big room for China's property sector to develop. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX -0.33% at 16,568.18, FTSE 100 -0.50% at 7,556.90, CAC 40 -0.18% at 7,398.00, Euro Stoxx 50 -0.22% at 4,444.85, IBEX 35 -0.83% at 9,993.08, FTSE MIB +0.05% at 30,344.00, SMI +0.20% at 11,229.90.

SECTORS: Consumer Stpl 0.33%, IT 0.32%, Telecoms -0.02%, Healthcare -0.03%, Industrials -0.24%, Materials -0.36%, Consumer Disc -0.39%, Energy -0.51%, Financials -0.59%, Utilities -0.95%

FTSE 100

BP (BP/ LN) - Co. is close to finalising the appointment of Murray Auchincloss, its acting chief executive, as permanent successor to Bernand Looney, according to Sky News. (Sky News) Subsequently confirmed.

GSK (GSK LN) - Announced intention to sell roughly 300mln shares in Haleon (HLN LN). Separately, Australia's first RSV vaccine AREXVY approved by TGA. (Newswires)

OTHER UK COMPANIES

Just Eat Takeaway (JET LN) - Q4 Trading Update (EUR): FCF was approx. break-even in H2'23, in line with guidance. NA orders -13% (exp. -9.9%). Raises FY23 adj. EBITDA 320mln (prev. guidance 310mln). Guidance for 2024 will be provided with FY23 results on 28 Feb 2024. (Newswires)

International Distributions Services (IDS LN) – Co’s Royal Mail has warned that it may need a bailout with taxpayer money to keep the service afloat following a sharp drop in letter sending. IDS CEO noted it is not sustainable to maintain the service built for 20bln letters when the Co. is only delivering 7bln and could drop to 4bln within five years. (Telegraph)

BROKER MOVES

Admiral (ADM LN) downgraded to Neutral from Buy at UBS

Drax (DRX LN) downgraded to Sell from Neutral at Citi

Deliveroo (ROO LN) upgraded to Overweight from Equal Weight at Barclays

Glencore (GLEN LN) downgraded to Hold from Buy at Deutsche Bank

IAG (IAG LN) upgraded to Buy from Neutral at Goldman Sachs

M&G (MNG LN) downgraded to Neutral from Buy at UBS

DAX

OTHER GERMAN COMPANIES

BROKER MOVES

Allianz (ALV GY) upgraded to Buy from Hold at SocGen

Munich Re (MUV2 GY) upgraded to Buy from Neutral at UBS

Wacker Chemie (WCH GY) downgraded to Neutral from Outperform at Oddo

CAC

French Cos - French President Macron said will ask the government to launch a new package of liberal market reforms to boost the economy; says France will be stronger if it is financially independent again. (Newswires)

L'Oreal (OR FP) - Canada unit to acquire all assets of Icon Salon Systems, no terms disclosed. (Newswires)

Renault (RNO FP) – Worldwide sales +9% in 2023 vs 2022. Electrified vehicle sales volume now accounts for almost 40% of the brand’s car passenger sales. In 2024, European and Latin American automotive markets are expected to be stable, and Eurasia is expected to decline by 11%. Renault sees no logistical impact from the situation in the Red Sea in the coming weeks. Renault wants to continue the “same level of performance” in 2024 vs 2023, according to the brand CEO. (Newswires)

Vinci (DG FP) - Reports Q4 passenger traffic +17% Y/Y. (Newswires)

OTHER FRENCH COMPANIES

Vallourec SA (VK FP) - To support multi-energy project for TotalEnergies (TTE FP) in Iraq; deliveries to start in 2024. GGIP includes recovery of gas currently being flared in the Basra region to supply power plants, along with the construction of a seawater treatment unit and a 1GW solar power plant. Will supply in aggregate 15k T of VAM of various tubes and connections, using the highest quality steel grades, from its Brazilian and European plants. (Newswires)

Worldline (WLN FP) - Co. taps bankers for defence strategy amid the share price falling; advisors have approached potential investors, according to Reuters sources. (Reuters)

BROKER MOVES

Scor (SCR FP) upgraded to Buy from Hold at SocGen

PAN EUROPE

China-exposed stocks - Chinese 2023 GDP rose 5.2% Y/Y (exp. 5.2%); Chinese GDP QQ SA (Q4) 1.0% vs. Exp. 1.0% (Prev. 1.3%, Rev. 1.5%); Chinese GDP YY (Q4) 5.2% vs. Exp. 5.3% (Prev. 4.9%); Chinese Retail Sales YY (Dec) 7.4% vs. Exp. 8.0% (Prev. 10.1%); Chinese Industrial Output YY (Dec) 6.8% vs. Exp. 6.6% (Prev. 6.6%).

Chemicals Sector - Barclays lowered price targets on several Chemical names; Lanxess (LXS GY), Evonik (EVK GY), Croda (CRDA LN), Covestro (1COV GY), BASF (BAS GY).

EV/Alcohol Names - The EU and China reportedly raised EV and liquor probes during a meeting in Davos on Tuesday, according to Bloomberg. (Bloomberg)

Ferrovial (FER SM) – On Tuesday, Ferrovial announced that other shareholders which hold 35% of Heathrow had elected to use their “tag-along” right, in relation to Ferrovial’s plan to sell out of Heathrow. FT reports that CDPQ, GIC and the UK Universities Superannuation Scheme intend to exit, according to sources. (FT)

Insurers - Insurers are reportedly seeking to exclude US and UK ships from Red Sea cover, according to Bloomberg citing Marsh & McLennan. (Bloomberg)

BROKER MOVES

Grifols (GRF SM) downgraded to Underperform from Outperform at Oddo

SMI

Geberit (GEBN SW) - FY23 (CHF): Revenue 3.08bln (exp. 3.07bln), Net Sales 3.08bln, -9.1%. The decrease was strongly influenced by the negative current effects of CHF 147mln, and in local currencies, this resulted in a decline of 4.8%. Despite the decline in sales, Co. still expects an EBITDA margin of 30% for FY23. Says due to challenging macroeconomic conditions and the ongoing geopolitical risks, the building construction industry is expected to decline overall in the current year. (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

Baloise (BALN SW) upgraded to Buy from Neutral at UBS

Swiss Life (SLHN SW) downgraded to Neutral from Buy at UBS

Zurich Insurance (ZURN SW) downgraded to Neutral from Buy at UBS

SCANDINAVIA

BROKER MOVES

CHR Hansen (CHR DC) downgraded to Hold from Buy at DNB Markets

Equinor (EQNR NO) downgraded to Sell from Neutral at UBS

Novozymes (NZYMB DC) downgraded to Hold from Buy at DNB Markets

Rockwool (ROCKB DC) downgraded to Underweight from Equal Weight at Morgan Stanley

US

CLOSES: SPX -0.37% at 4,765, NDX -0.01% at 16,830, DJIA -0.62% at 37,361, RUT -1.21% at 1,927.

SECTORS: Energy -2.4%, Materials -1.19%, Utilities -1.05%, Industrials -0.98%, Financials -0.64%, Real Estate -0.61%, Health -0.55%, Consumer Staples -0.48%, Communication Services -0.42%, Consumer Discretionary -0.2%, Technology +0.39%.

JetBlue (JBLU) and Spirit Airlines (SAVE) - Deal blocked by a judge on antitrust grounds, according to Bloomberg. (Bloomberg) Spirit shares finished the session -47% and fell another 5% after-hours

Tesla (TSLA) - Cuts prices of its Model Y in Germany; Model Y Long Range cut to EUR 49,990 (prev. EUR 54,990). In other news, Co's latest Model 3 could be banned in Australia after the safety rating is withheld, via Epoch Times. (Newswires/ Epoch Times)

17 Jan 2024 - 06:53- EnergyResearch Sheet- Source: Newsquawk