Newsquawk Daily European Equity Opening News - 19th January 2024

19th January 2024

ASIA

APAC stocks mostly took impetus from the tech-led advances on Wall St where sentiment was underpinned after initial jobless claims fell to the lowest since September 2022 and with tech encouraged by TSMC's earnings which lifted the Co.'s shares by over 6% and underpinned other chipmakers including Samsung Electronics. ASX 200 climbed back above 7,400 with the advances led by tech after similar outperformance stateside. Nikkei 225 was underpinned and briefly climbed above 36,000 after Japanese CPI data continued to soften and a source report noted there was no pressure for the BoJ to rush towards the exit. Hang Seng and Shanghai Comp were subdued amid the lingering concerns surrounding an uneven recovery in the Chinese economy, while a restriction on short sales by China's largest brokerage did little to spur a recovery.

CITIC Securities (6030 HK) - China's largest brokerage CITIC Securities restricts short sales following the stock rout, according to Bloomberg. (Bloomberg)

EUROPEAN CLOSES

CLOSES: DAX +0.82%, at 16,566.03, FTSE 100 +0.18%, at 7,459.45, CAC 40 +1.13%, at 7,401.35, Euro Stoxx 50 +1.15%, at 4,453.85, IBEX 35 +0.10%, at 9,877.50, FTSE MIB +0.84%, at 30,352.00, SMI +0.41%, at 11,194.20.

SECTORS: IT 3.06%, Consumer Disc 2.24%, Industrials 1.04%, Financials 0.51%, Materials 0.40%, Telecoms 0.12%, Energy -0.13%, Healthcare -0.36%, Consumer Stpl -0.70%, Utilities -0.76%

FTSE 100

Glencore (GLEN LN) - Co. and Trafigura are pushing Asian smelters to accept low spot prices for turning their mined copper into metal this year, according to Reuters citing sources. (Reuters)

OTHER UK COMPANIES

Drax (DRX LN) - The UK Government is preparing to extend subsidies to beyond 2027 for Drax's biomass power station, via the FT. This has sparked criticism from campaigners who would like the plant to focus on wind and solar projects. (Guardian)

BROKER MOVES

Kingspan (KGP LN) upgraded to Hold from Underperform at Jefferies

Persimmon (PSN LN) upgraded to Overweight from Underweight at Morgan Stanley

Watches of Switzerland (WOSG LN) downgraded to Hold from Buy at Kepler

DAX

BASF (BAS GY) - FY Prelim (EUR): adj. EBIT 3.81bln (exp. 3.85bln); Sales 68.90bln (exp. 70.58bln); Miss in forecasts "primarily attributable to non-cash-effective impairments for EUR 1.1bln". Sales and EBIT before special items are below the ranges forecasted by BASF and slightly below the respective analyst consensus. EBIT and net income are considerably below the respective analyst consensus due to non-cash-effective impairments. These mainly relate to the Surface Technologies, Agricultural Solutions and Materials segments. Cash flows from operating activities above the prior year. Co. holds a 3.5% weighting in the DAX 40. Shares -2.5% in pre-market trade.

BMW (BMW GY) - Brilliance China Automotive Holdings (1114 HK) said report of selling BMW JV stake is untrue. (Newswires) It was reported Brilliance China’s (1114 HK) main investor is said to be mulling fund-raising strategies, such as divesting its 25% share in the BMW joint venture amid Brilliance Auto Group's restructuring plans following the default on debt in 2020, according to sources cited by Bloomberg.

German Finance - German lawmakers approve the delayed 2024 federal finance plan; the budget is said to foresee EUR 39bln in net new borrowing, which would allow it to stay within its self-imposed brake on issuance, according to Reuters sources. (Reuters)

German union - The IG union said it has demanded a pay rise of around 21% for more than 930k construction workers, via the FT. (FT)

Qiagen (QIA GY) - Announces details for completion of synthetic share repurchase of up to approx. USD 300mln. (Newswires)

OTHER GERMAN COMPANIES

BROKER MOVES

CAC

Saint Gobain (SGO FP) - Announces two new acquisitions on the attractive non-residential flooring market, further strengthening its presence in this construction chemicals segment, with no terms disclosed. (Newswires)

OTHER FRENCH COMPANIES

Eiffage (FGR FP) - Wins the contract for construction of the Helios 2 extension of Campus Thales. (Newswires)

BROKER MOVES

Credit Agricole (ACA FP) upgraded to Equal Weight from Underweight at Morgan Stanley

Teleperformance (TEP FP) upgraded to Buy from Hold at Stifel

PAN EUROPE

Chip names - Supermicro (SMCI) raises Q2 guidance; EPS view USD 5.40-5.55 (prev. 4.40-4.88, exp. 4.52) and revenue between USD 3.6-3.65bln (prev. 2.7-2.9bln, exp. 2.78bln). Shares +10.9% after-hours (Newswires)

BROKER MOVES

KBC (KBC BB) upgraded to Overweight from Equal Weight at Morgan Stanley

SMI

ABB (ABBN SW) - Received US Committee letter on strategic competition with China; Co. shares it is taking the matter seriously, according to Politico. (Politico)

UBS (UBSG SW) - Co. is to sell Credit Suisse distressed debt assets individually, according to Bloomberg. (Bloomberg)

OTHER SWISS COMPANIES

SFS (SFSN SW) - FY23 (CHF): Revenue 3.09bln (exp. 3.12bln). (Newswires)

Temenos (TEMN SW) - FY23 (USD): ARR 730mln, +16% Y/Y (prev. guided +13-15%), Adj. margin 12% (prev. guided >8%)

BROKER MOVES

SCANDINAVIA

Ericsson (ERICB SS) downgraded to Underweight from Equal Weight at Barclays

Huhtamaki (HUH1V FH) downgraded to Hold from Buy at Danske Bank

Nokia (NOKIA FH) downgraded to Underweight from Equal Weight at Barclays

Salmar (SALM NO) upgraded to Equal Weight from Underweight at Barclays

TietoEvry (TIETO FH) downgraded to Hold from Buy at Handelsbanken

Wartsila (WRT1V FH) downgraded to Sell from Hold at Handelsbanken

BROKER MOVES

US

CLOSES: SPX +0.88% at 4,780, NDX +1.47% at 16,982, DJIA +0.54% at 37,468, RUT +0.55% at 1,923.

SECTORS: Technology +2.03%, Communication Services +1.38%, Industrials +1.34%, Consumer Discretionary +0.62%, Materials +0.39%, Financials +0.23%, Health +0.01%, Consumer Staples -0.11%, Energy -0.22%, Real Estate -0.61%, Utilities -1.05%.

US Banks - The US reportedly plans to push more banks to use the Fed's discount window, according to Bloomberg. US regulators are preparing to introduce a plan to require that banks tap the Federal Reserve’s discount window at least once a year to reduce the stigma and ensure lenders are ready for troubled times. The proposal, which is being drafted behind closed doors by the Office of the Comptroller of the Currency, Fed and FDIC, is the latest response to last year’s regional bank crisis. The turmoil spotlighted that several lenders weren’t even set up operationally to quickly borrow from the window in a pinch. (Bloomberg)

Supermicro (SMCI) - Raises Q2 guidance; EPS view USD 5.40-5.55 (prev. 4.40-4.88, exp. 4.52) and revenue between USD 3.6-3.65bln (prev. 2.7-2.9bln, exp. 2.78bln); cites "strong market and end customer demand for rack-scale, AI and Total IT Solutions". (Newswires) Shares +10.9% after-hours

PPG (PPG) - Guides Q1 input cost deflation in a "mid-single-digit" percentage; expects to deliver volume growth in 2024; expects to incur annual wage inflation in 2024 and will employ productivity gains as an offset. (Newswires)

19 Jan 2024 - 06:49- Research Sheet- Source: Newswires