Newsquawk Daily European Equity Opening News - 27th January 2025

ASIA

APAC stocks traded mixed in a holiday-thinned start to the week as participants digested disappointing Chinese PMI data, Trump's tariff announcement on Colombia, and with Chinese start-up DeepSeek threatening US dominance in the AI sector with a low-cost model on par with OpenAi's o1. Markets in Australia, South Korea and Taiwan were closed for holidays. Nikkei 225 reversed opening gains and dipped back beneath 40,000 amid headwinds from Trump tariffs and Chinese PMIs. Hang Seng and Shanghai Comp were kept afloat on the last trading day for the mainland before the Chinese New Year holiday despite the disappointing PMI data which showed headline Chinese Manufacturing PMI back in contraction territory. Nonetheless, there was notable strength seen in some AI-related stocks after Chinese tech start-up DeepSeek's low-cost AI model was reported to be on par with OpenAI's o1.

EUROPEAN CLOSES

CLOSES: Euro Stoxx 50 +0.03% at 5,219, FTSE 100 +0.00% at 8,502, CAC 40 +0.44% at 7,928, IBEX 35 +0.00% at 11,983, FTSE MIB +0.00% at 36,201, PSI -0.25% at 6,504, DAX -0.12% at 21,386, SMI +0.10% at 12,277

SECTORS: Healthcare 1.19%, Consumer Disc 0.78%, Materials 0.77%, Consumer Stpl 0.22%, Industrials -0.18%, Financials -0.28%, Utilities -0.55%, IT -1.03%, Telecoms -1.21%, Energy -1.30%

FTSE 100

Anglo American (AAL LN) - BHP (BHP AT) has reportedly cooled on returning with another bid for Anglo American, via FT citing sources; as the upside seen in Anglo American shares means the deal is now too expensive. (FT)

Banking Names - UK Finance, a trade body, has said the BoE would "create capital instabilities" and be "burdensome" for such names if the BoE is provided with powers to remove MREL debt, funding which is designed to be used in the event of a crisis. (FT)

Barclays (BARC LN) - Co. is to launch new banking products which will have exclusive offers for AARP members, as of Spring 2025 high-yield savings accounts to launch. Thereafter, competitive personal loans. (Newswires)

Defence Names - UK PM Starmer is expected to resist pressure from US President Trump to increase defence spending amid concerns surrounding public finances, according to The Times citing sources. (Times)

Diageo (DGE LN) - Co. dismissed speculation about selling Guinness or its Moet Hennessy stake, Reuters reports. Guinness outperformed Diageo’s spirits segment, with strong sales growth, including its zero-alcohol variant. Updates are expected in Diageo’s interim results, due February 4th. (Newswires)

Tech Names - UK Science Minister Kyle has said the gov't is looking to double the economic output of the Oxford-Cambridge Arc. (FT)

OTHER UK COMPANIES

Serco (SCO LN) - Workers are to commence strike action in February. (FT)

WH Smith (SMWH LN) - Co. confirms that it is exploring potential options for its high street unit, including a sale. (Newswires) Follows Sky News reports that the Co. was in talks to sell the high street unit.

BROKER MOVES

DAX

BASF (BAS GY) - Prelim. 2024 (EUR): Sales 65.3bln (exp. 65.3bln), EBITDA 7.9bln (exp. 7.85bln), EBIT 2.0bln (exp. 3.85bln), Cash Flow 6.9bln (prev. 8.1bln). (Newswires)

Volkswagen (VOW3 GY) - Audi CEO said it is possible that Chinese automakers could take over Volkswagen's surplus production lines within Europe. (FT)

OTHER GERMAN COMPANIES

Stabilius (STM1 GY) - Q1 (EUR): Revenue 326mln, adj. EBIT 37.8mln. FY Outlook: Revenue 1.3-1.45bln (exp. 1.38bln). (Newswires)

BROKER MOVES

CAC

Airbus (AIR FP) - London City Airport is to apply to the CAA to amend rules which would allow the Airbus A320neo to be used, via Sky News citing sources. A craft which is used by easyJet (EZJ LN) and Wizz Air (WIZZ LN). (Sky News)

Sanofi (SAN FP) - CD&R has outbid rivals for Sanofi's consumer health unit, offering EUR 15.5bln, FT reports. The deal, which includes a 50% stake for Sanofi, has sparked concerns in France over national control of essential medicines, like Doliprane. (FT)

OTHER FRENCH COMPANIES

Bureau Veritas (BVI FP), SGS (SGSN SW) - Bureau Veritas announced the end of talks with SGS regarding a USD 33bln merger, Bloomberg reports. Bureau Veritas still maintains confidence in the potential for consolidation within the testing, inspection, and certification. (Bloomberg)

BROKER MOVES

Legrand (LR FP) downgraded to Underperform from Hold at Jefferies

LVMH (MC FP) upgraded to Overweight from Equal Weight at Morgan Stanley; note states "while LVMH should face a number of challenges in 2025, the Group’s prospects have materially improved in recent weeks, a function of more favourable industry dynamics but also company specific factors (improving prospects at key brands Vuitton/Tiffany/Bulgari".

PAN EUROPE

BMPS (BMPS IM)/MedioBanca (MB IM) - Italy's Finance Minister said it supports Banca Monte dei Paschi Siena’s bid to acquire Mediobanca, citing the potential benefits for the national economy, Bloomberg reports. FinMin praised BMPS' management and its transparent approach, emphasising the positive impact on the market. Furthermore, Mediobanca's CEO confirmed that an unsolicited takeover attempt was made by Monte dei Paschi, and the board will meet soon to assess the offer and protect stakeholders' interests. (Bloomberg)

Energy Names - EU is reportedly unlikely to be reliant on sanctions to end Russian LNG imports, via Bloomberg citing sources. (Bloomberg)

Ryanair (RYA ID) - Q3 Update (EUR): Profit 149mln (exp. 60mln), Average Fares +1%. Q4 comp Y/Y is "very challenging". Boeing (BA) delays mean that FY26 target has been revised to 206mln (prev. 210mln), hopeful the remaining 20 737 Max in the orderbook will be delivered before March 2026. Still expect 2025 traffic of near 200mln, assuming no more Boeing delays. CEO: seen big improvements in the Boeing factory, quality of the fuselage has improved greatly. Early indicators of summer booking are robust. On buybacks, says investors should expect them but they will be more muted for a year or two. (Newswires)

Tech/AI Names - In APAC trade, there was strength seen in some AI-related stocks after Chinese tech start-up DeepSeek's low-cost AI model was reported to be on par with OpenAI's o1. (Newswires)

Universal Music Group (UMG NA) - Co. and Spotify (SPOT) have agreed a new multi-year agreement. (Newswires)

BROKER MOVES

SMI

Roche (ROG SW) - New results from EMBARK demonstrating significant sustained benefits of Elevidys in ambulatory individuals with Duchenne muscular dystrophy. Results were statistically significant and clinically meaningful two years after treatment with Elevidys, compared to a pre-specified propensity-weighted untreated external control group. (GlobeNewswire)

OTHER SWISS COMPANIES

BROKER MOVES

Givaudan (GIVN SW) upgraded to Overweight from Neutral at JPMorgan

SCANDINAVIA

Julius Baer (BAER SW) - Stefan Bollinger appointed CEO. Lacher to step down as Chairman, successor to be nominated in March. (Newswires)

BROKER MOVES

US

CLOSES: SPX -0.29% at 6,101, NDX -0.58% at 21,774, DJI -0.32% at 44,424, RUT -0.30% at 2,308.

SECTORS: Technology -1.09%, Energy -0.98%, Consumer Discretionary -0.54%, Industrials -0.42%, Materials -0.23%, Health +0.13%, Financials +0.22%, Real Estate +0.31%, Consumer Staples +0.36%, Utilities +1.07%, Communication Services +1.09%.

27 Jan 2025 - 06:55- Exclusive- Source: Newsquawk