Newsquawk Daily European Equity Opening News - 6th December 2023

6th December 2023

ASIA

Asia-Pac stocks were mostly higher with risk sentiment underpinned by a softer yield environment as market focus remains on this week's data releases and with the recent drop in US JOLTS job openings stoking hopes for Fed rate cuts. ASX 200 (+1.7%) was lifted with the outperformance in real estate front running the broad gains across sectors amid lower yields and with participants unfazed by mixed GDP data. Nikkei 225 (+2.0%) outperformed and climbed back above the 33,000 level with advances facilitated as the 10yr JGB yield declined to its lowest since August. Hang Seng (+1.3%) and Shanghai Comp. (+0.1%) were somewhat varied as the Hong Kong benchmark conformed to the overall upbeat mood, while the mainland lagged after the PBoC continued to drain liquidity and Moody’s revised China’s credit outlook to negative.

EUROPEAN CLOSES

CLOSES: DAX +0.78% at 16,533.11, FTSE 100 -0.31% at 7,489.84, CAC 40 +0.74% at 7,386.99, Euro Stoxx 50 +0.85% at 4,452.35, IBEX 35 +0.59% at 10,238.40, FTSE MIB +0.56% at 30,082.88, SMI +0.15% at 10,968.70.

SECTORS: IT 1.10%, Consumer Disc 0.90%, Industrials 0.67%, Telecoms 0.61%, Utilities 0.49%, Financials 0.34%, Consumer Stpl -0.12%, Energy -0.15%, Materials -0.16%, Healthcare -0.30%

FTSE 100

Antofagasta (ANTO LN) - Workers at its Centinela mine on Tuesday began the mediation process after contract talks failed, a last resort before the union could go on strike, according to Reuters. (Reuters)

Barclays (BARC LN) - Citi (C) and Bank of America (BAC) are left holding some Barclays after the Qatari stake sale, according to Reuters. (Reuters)

Diageo (DGE LN) - Is looking to divest its beer portfolio, except for its flagship brand Guinness, according to Axios. (Axios)

Entain (ENT LN) - Co. will pay GBP 615mln as recompense for failing to prevent bribery at its Turkish subsidiary. This brings to close a court term of four years, though additional charges may still be laid against individuals, via FT. (FT)

HSBC (HSBA LN) - Cuts at least four bank jobs in Hong Kong, due to a lack of deals in the region, according to Bloomberg citing sources. (Bloomberg)

Rio Tinto (RIO LN) - Co. said China's iron ore demand is 'very decent' amid the auto sector boom. In other news, Co. estimates the initial share of capex to develop Simfer mine and co-developed rail and port infrastructure project is about USD 6.2bln. Co. reported mineral resources exclusive of ore reserves of 1.4bln tonnes at 66.1% FE and low impurities for Simandou. The first production from Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60mln tonnes per year. Rio Tinto’s share of capital investment is expected to be around USD 10bln per year from 2024 to 2026. Production ramping up from Oyu Tolgoi in Mongolia which is set to deliver 500 kt of copper per year on average for the period 2028-2036. The largest investment over the next 3 years is expected to be Co's equity share of the Simandou project once approved by the board. Forecasts 2024 Pilbara iron ore shipments 323-338mln tons. Space in the market for another iron ore mine. (Newswires/Rio Tinto)

OTHER UK COMPANIES

BROKER MOVES

Diageo (DGE LN) downgraded to Sell from Neutral at UBS

Ocado (OCDO LN) upgraded to Neutral from Underweight at JP Morgan

DAX

BMW (BMW GY) - Co. is to start a second tranche of share buyback for up to EUR 410mln beginning January 2nd. (Newswires)

Bayer (BAYN GY) - Co. has been ordered to pay around USD 3.5mln by the Philadelphia jury in the Roundup trial. (Newswires)

Merck (MRK GY) - Phase III trial results for evobrutinib in relapsing multiple sclerosis did not meet the primary endpoint of reducing annualized relapse rates (ARR) compared to oral teriflunomide. (Newswires)

Volkswagen (VOW3 GY) - Results of an audit of the Urumqi plant in Xinjiang show no signs of forced labour. (Newswires)

OTHER GERMAN COMPANIES

Evotec (EVT GY) - Evotec-partner Jingxin receives approval for EVT201 in China. (Newswires)

BROKER MOVES

MorphoSys (MOR GY) initiated with Market Perform at Leerink Partners

Merck (MRK GY) downgraded to Hold from Buy at HSBC

Scout24 (G24 GY) downgraded to Neutral from Overweight at JP Morgan

CAC

Airbus (AIR FP) - November deliveries reported at 64, with YTD deliveries at 623; November gross orders at 113 and YTD at 1,512. (Newswires)

Societe Generale (GLE FP) – Co. will launch its own stablecoin, EUR CoinVertible, on BitStamp. (FT)

Safran (SAF FP) – The CEO does not exclude the initiation of an official protest against Italy’s decision to block the acquisition of Collins Aerospace. (Newswires)

OTHER FRENCH COMPANIES

Orpea (ORP FP) - Launches capital increase at EUR 0.0178/shr. (Newswires)

BROKER MOVES

PAN EUROPE

ASM International (ASM NA) - Co. plans to invest EUR 300mln in a new US headquarters in Arizona, furthering its expansion in the State. It is set to hire 500 employees for the new facility, according to Bloomberg. (Bloomberg)

Chip Names – Pragmatic Semiconductor has secured GBP 182mln of funding, setting the Co. on track to be the UK’s biggest semiconductor manufacturer on a volume basis. (FT)

Defence Names - Japan, Britain and Italy are to establish a new organisation to develop an advanced fighter jet. (Newswires)

EU Fiscal Policy - EU Finance Ministers are discussing debt reduction targets as part of a fiscal overhaul which could include a fiscal buffer of 1.5% of GDP, according to Bloomberg. (Bloomberg)

Enel (ENEL IM) - S&P cuts rating one notch to BBB from BBB+; outlook stable. (Newswires)

Telecom Italia (TIT IM) - Confirms KKR seeks to continue due diligence on the submarine cable unit through to the end of 2024. (Newswires)

BROKER MOVES

AB InBev (AVI BB) upgraded to Neutral from Sell at UBS

Inditex (ITX SM) downgraded to Sell from Hold at Deutsche Bank

SMI

Novartis (NOVN SW) - Receives FDA approval for Fabhalta® (iptacopan), offering superior haemoglobin improvement in the absence of transfusions as the first oral monotherapy for adults with PNH. (Novartis)

OTHER SWISS COMPANIES

Clariant (CLN SW) – Closing its Sunliquid Bioethanol plant in Romania, as the strategic review has now concluded. Anticipate a cash impact of CHF 110-140mln in 2024; now expects FY24 EBITDA at 570-600mln (prev. guided 650-700mln, exp. 761mln). (Newswires)

BROKER MOVES

SCANDINAVIA

Clas Ohlson (CLASB SS) – Q2 (SEK): Sales 2.46bln (exp. 2.4bln), EBIT 245mln (exp. 208mln), Net 173mln (exp. 150mln), EPS 2.74 (exp. 2.23); cost inflation and weak SEK had a negative impact in the period. Christmas sales have started well. Targeting the opening of circa. 10 stores in 2023/24. (Newswires)

BROKER MOVES

Alfa Laval (ALFA SS) downgraded to Neutral from Outperform at BNP Paribas

Epiroc (EPIA SS) downgraded to Underperform from Neutral at BNP Paribas

Fastighets Balder (BALDB SS) downgraded to Hold from Buy at SEB

Fabege (FAB SS) downgraded to Hold from Buy at SEB

Genmab (GMAB DC) upgraded to Buy from Neutral at UBS

H&M (HMB SS) downgraded to Sell from Hold at Deutsche Bank

US

CLOSES: SPX -0.06% at 4,567, NDX +0.24% at 15,877, DJIA -0.22% at 36,124, RUT -1.38% at 1,856.

SECTORS: Energy -1.7%, Materials -1.37%, Industrials -0.86%, Utilities -0.81%, Consumer Staples -0.79%, Financials -0.51%, Real Estate -0.45%, Health -0.17%, Communication Services +0.22%, Consumer Discretionary +0.32%, Technology +0.82%.

Apple (AAPL) - Moved towards India-made iPhone batteries in a push away from China, according to FT. (FT)

Charter Communication (CHTR) - CFO says it could see negative broadband additions in Q4 citing short-term challenges such as the carryover churn related to Disney and rate impacts - UBS conference. (Newswires)

Mastercard (MA) - Announces USD 11bln share buyback programme and raises quarterly dividend 16% to USD 0.66/shr (prev. 0.57/shr). (Newswires)

Microsoft (MSFT) - Is adjusting prices for cloud services to align global levels, effective Feb 1st, 2024. (Newswires)

Nvidia (NVDA) - CEO says the plan is to continue working with the US government to come up with a new set of products that comply with new chip export regulations. (Newswires)

06 Dec 2023 - 06:51- Research Sheet- Source: Newsquawk