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BEFORE THE BELL: RISING YIELDS KEEP EUROPE ON EDGE, FRENCH OPERATORS FALL
European shares were set for a muted open on Tuesday as investors weighed higher bond
yields, firmer oil prices and growing expectations of further U.S. monetary tightening.
Euro STOXX 50 .STOXX50E , DAX .GDAXI and FTSE .FTSE futures edged up 0.1%-0.2%, while
U.S. futures pointed to a slightly weaker open on Wall Street.
Markets are pricing a more than 72% chance of a 25-basis-point Federal Reserve rate hike in
October, according to CME's FedWatch tool.
U.S. plans to ban Chinese components from data centres also weighed on sentiment in Asia,
leaving China's blue-chip CSI300 .CSI300 pinned near a one-year low.
The STOXX 600 .STOXX is on track to end September down nearly 2%, its weakest month since
March, when it fell 8%. The pan-European index is down about 0.5% this quarter.
In corporate news, French infrastructure operators could come under pressure after Les Echos
reported the government plans to increase taxes on motorway and airports as part of its 2027
budget. Shares in Vinci SGEF.PA , Eiffage FOUG.PA and airport operator ADP ADP.PA were
called around 3% lower.
Subdued consumer sentiment, rising price sensitivity and weak demand during a European
heatwave meanwhile prompted Lindt LISN.S to cut its outlook. Shares in the Swiss chocolatier
were indicated 5% lower, with peers Barry Callebaut BARN.S and Nestle NESN.S also seen under
pressure.
Financials may also remain in focus after the Financial Times reported that UniCredit
CRDI.MI plans to move to full control of Commerzbank CBKG.DE within months.
Elsewhere, an upgraded earnings outlook from container shipping group Hapag-Lloyd HLAG.DE
could support sentiment towards peers Maersk MAERSKb.CO and DSV DSV.CO , while Legrand's
LEGD.PA raised sales target may provide a boost to the broader electrical equipment sector, a
key beneficiary of data-centre investment.
(Danilo Masoni)
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