Newsquawk Daily European Equity Opening News - 9th October 2023

9th October 2023

ASIA

Asia-Pac stocks were mostly lower in severely holiday-quietened conditions and US equity futures were pressured amid geopolitical concerns after a surprise multi-front attack by Hamas on Israel which resulted in at least 700 Israeli deaths and prompted Israel to declare war on Hamas with air strikes conducted on Gaza where 400 have been killed. The conflict spurred a flight to safety which underpinned T-note futures and gold although the biggest moves were seen in oil prices which jumped amid the heightened geopolitical risk as a report also claimed that Iranian security officials helped plan Hamas’s surprise attack. ASX 200 (+0.2%) kept afloat with gains led by strength in the energy and mining-related sectors as underlying commodity prices were lifted owing to the conflict in the Middle East and the return of Chinese buyers to the market. Shanghai Comp. (-0.7%) was pressured as participants returned from the Mid-Autumn Festival and National Day Golden Week holidays, while Hong Kong trade was delayed for most of the day due to a typhoon no. 8 signal and black rainstorm warning which further added to the already thinned markets due to holiday closures in Japan, South Korea and Taiwan.

EUROPEAN CLOSES

CLOSES: DAX +1.09% at 15,234, FTSE 100 +0.56% at 7,493, CAC 40 +0.88% at 7,060, Euro Stoxx 50 +1.10% at 4,145, IBEX 35 +0.84% at 9,235, FTSE MIB +1.13% at 27,801, SMI +0.53% at 10,840.

SECTORS: IT 1.91%, Financials 1.65%, Energy 1.27%, Consumer Disc 1.13%, Materials 1.06%, Industrials 1.00%, Healthcare 0.74%, Telecoms 0.46%, Utilities -0.14%, Consumer Stpl -1.48%

FTSE 100

Energy Names - Ofgem figures show that energy firms are holding onto GBP 8.1bln of customers' bill overpayments, according to the BBC. (BBC)

JD Sports (JD/ LN) - Dominic Platt has been appointed as the new CFO, effective October 4th. (Newswires)

IAG (IAG LN) - Is in talks with Airbus (AIR FP) and Boeing (BA) for potential widebody order; IAG could order 20 or more aircrafts, according to Bloomberg. (Bloomberg)

OTHER UK COMPANIES

Metro Bank (MTRO LN) - UK Prudential Regulation Authority approached a number of large UK lenders, including NatWest (NWG LN), Santander (BNC LN), Lloyds (LLOY LN) in the past week to see if they were interested in Metro Bank, according to FT. It was later reported that Metro Bank secured a GBP 325mln capital raise which includes GBP 150mln of new equity and GBP 175mln of new MREL issuance, alongside GBP 600mln of debt refinancing, while it is in discussions regarding an asset sale of up to GBP 3bln in residential mortgages, according to Reuters. Additionally, according to Sky News, the bank rejected a secret takeover approach last month - Shawbrook reportedly tabled several bids to Metro Bank, including one as recently as the H2 September. (FT / Reuters/ Sky News)

BROKER MOVES

Compass Group (CPG LN) upgraded to Buy from Hold at Jefferies

DAX

Deutsche Telekom (DKE GY) - Reportedly wants to cut thousands of jobs, according to Handelsblatt. (Handelsblatt)

OTHER GERMAN COMPANIES

Schaeffler (SHA GY) / Vitesco (VTSC GY) - Schaeffler offers to purchase Vitesco for EUR 91/shr. (vs EUR 75.35 close on Friday). (Newswires)

BROKER MOVES

BASF (BAS GY) downgraded to Market Perform from Outperform at Bernstein

Lanxess (LXS GY) reiterated with Neutral at JP Morgan

Sartorius (SRT GY) initiated with Equal Weight at Barclays

CAC

Teleperformance (TEP FP) - Increase of assets allocated to the Liquidity Contract entered into with Kepler Cheuvreux. (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

Sodexo (SW FP) upgraded to Buy from Hold at Jefferies

PAN EUROPE

Auto-Names - EU set to loosen new rules on EV sales in an attempt to defuse the dispute with the UK, according to FT. (FT)

Defence/oil names - Geopolitical concerns were stoked over the weekend after a surprise multi-front attack by Hamas on Israel which resulted in at least 700 Israeli deaths and prompted Israel to declare war on Hamas with air strikes conducted on Gaza where 400 have been killed. Oil prices rose 5% intra-day at one stage amid the heightened geopolitical risk as a report also claimed that Iranian security officials helped Hamas plan the attack. (Newswires) Rheinmetall (RHM GY) called to open +2.9%.

Energy Names - France is pushing for a quick deal on the EU power reform in hopes to counter US subsidies, with France's energy minister adding that the US will be the main winner if not finalised, according to the FT. (FT)

Metal Names - Copper producers warned of a lack of mines to meet the demand for the metal, according to FT. (FT)

Monte Paschi (BMPS IM) - Italy's Treasury starts the process of picking legal and financial advisors to select the best options to sell a controlling stake in Co. (Newswires)

Stellantis (STLAM IM/ STLAP FP) - Says they are making progress in UAW talks but there are gaps that still need to be closed. Made a proposal that provides significant wage increases of 21.4% when compounded through 2027 for all full-time hourly employees and that will implement an immediate 10% wage increase for most employees upon contract ratification. Will accelerate time to reach top wage rate for in-progression employees to 4 years from 8. Will raise starting wage rate for supplemental employees by 26.7% to USD 20/hr.Will provide cost-of-living adjustments calculated every quarter. Will invest billions in the US to provide job security. Will provide significant improvement to co. 401k contribution for in-progression employees. Remains optimistic that discussions are providing a pathway to a tentative agreement. (Newswires)

Telecom Italia (TIT IM) - Italy's treasury is keen to implement a plan to bid with KKR for the Co's grid, according to a source cited by Reuters. (Reuters)

BROKER MOVES

Banco BPM (GPMI IM) reiterated with Neutral at JP Morgan

Cellnex (CLNX SM) reiterated with Overweight at JP Morgan

UniCredit (UCG IM) reiterated with Overweight at JP Morgan

SMI

Novartis (NOVN SW) - FDA approves Novartis Cosentyx® as the first intravenous (IV) formulation interleukin-17A antagonist for rheumatic diseases. (Novartis)

OTHER SWISS COMPANIES

Julius Baer (BAER SW) - Makes several changes to the executive board. Yves Robert Charue and Beatriz Sanchez to step down. (Newswires)

BROKER MOVES

Lonza (LONN SW) initiated with Overweight at Barclays

SCANDINAVIA

Volvo (VOVVB SS) - UAW says union workers at Volvo-owned Mack Trucks overwhelmingly rejected the proposed five-year contract and will strike at 07:00EDT on Monday. Union workers at Mack Trucks, owned by Volvo Group, rejected a proposed five-year contract and will strike on Monday. Around 73% of the 4,000 workers voted against the deal, according to the United Auto Workers. (Newswires)

BROKER MOVES

Atea (ATEA NO) upgraded to Buy from Hold at Carnegie Securities

Hexpol (HPOLB SS) upgraded to Buy from Hold at Danske Bank

Saab (SAABB SS) upgraded to Buy from Hold at SEB

US

CLOSES: SPX +1.18% at 4,308, NDX +1.70% at 14,973, DJI +0.87 at 33,408, RUT +0.81% at 1,746

SECTORS: Technology +1.94%, Communication Services +1.82%, Utilities +1.37%, Industrials +1.33%, Health +1.01%, Materials +0.96%, Financials +0.82%, Consumer Discretionary +0.7%, Energy +0.41%, Real Estate +0.34%, Consumer Staples -0.48%.

Auto-Names - UAW union says it has breaking developments; will not announce additional strikes for Ford (F) or Stellantis (STLA) but was considering a plan to strike at General Motors (GM) SUV plant in Arlington, Texas; before it decided against the move

Microsoft (MSFT) - Will debut an AI chip next month that could cut its Nvidia (NVDA) GPU costs, according to The Information. (The Information)

09 Oct 2023 - 06:56- Geopolitical- Source: Newsquawk