Live Markets: Hanging on in there with a little help of Santander

ASM SA

29/01/2020 08:59

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your
thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net        
    
    HANGING ON IN THERE WITH A LITTLE HELP OF SANTANDER (0856 GMT) 
    Seems the market finally chose its side and tilted towards 'risk-on' as Q4 headlines piled
in with Santander giving a much needed boost to Spain's IBEX and more critically the banking
sector as a whole. 
    The Spanish bank is up over 4%, lifting the sector to a 1% rise, which is in turn helping
the STOXX 600 cling on yesterday's rebound with a 0.4% rise.
    Signs that the mood is upbeat, cyclicals are back in favours with miners and autos for
instance in the leading pack.
    Airlines are recovering despite BA suspending its flight to China. Clearly Wizz Air's
results are helping and so is a positive Berenberg note on Lufthansa.  
    KPN is close to single-handedly bring the telecom sector in negative territory with an
impressive 6.8% fall after disappointing Q4 results. 
    The Tech sector is also brought down by Avast which is down close to 10% on negative reports
about an anti virus software. Meanwhile, Temenos is enjoying a 2.5% boost after the announcement
of a partnership with Google. 
    Another big loser is SES  SESFd.PA , sliding 6% on a senate bill that limits payout to
companies that vacate C-band airwaves. The SMARTER Act proposes satellite operators receive an
incentive payment of just $1 billion, Exane says, adding that it's well below market
expectations (Exane est. $9.4 billion)  urn:newsml:reuters.com:*:nL8N29Y29J
    Here's your opening snapshot: 
    (Julien Ponthus) 
    *****
    

    
    ON THE RADAR: AIRLINES, LVMH, TELCOS AND THE APPLE READ-ACROSS
    Among news which could spook the market and travel/leisure stocks is British Airways
suspending all direct flights to and from mainland China. 
    On the upside, Wizz Air is expected to rise 2-3% after it upgraded its annual profit
forecast.
    Also the fact that sales growth at LVMH were impacted by protests in Hong Kong could send
jitters through the luxury sector even though Italy’s Salvatore Ferragamo met its guidance with
a slight increase in 2019 revenues. The French luxury group is expected to lose 2-3% at the
open.  
    Apple’s results is likely to cheer up European suppliers such as Dialog Semiconductor,
STMicro, ASML or AMS but investors could view it as a glass half empty due to possible supply
disruptions from fast-spreading coronavirus.
    In other tech news, Software is likely to be a big faller during the session after a poor
set of results. 
    Europe’s Q4 season has begun in earnest and telecoms look in a good spot with Finland’s
Elisa, The Netherlands’ Dutch Royal KPN, Norway's Telenor and Sweden’s Telia all reporting
upbeat earnings. There’s also some M&A with Vodafone agreeing to sell its 55% stake in its
Egyptian unit for $2.4 billion
    Good news for banks also with Sweden’s SEB and Spain’s Santander unveiling with better than
expected profits. 
    UK house prices rising at their fastest pace since Nov 2018 will no doubt continue to fuel
speculation on the BoE's possible rate cut but could help house builders.
    Novartis is also thought to be a winner after fourth-quarter core net income rose 13%.
    From pre-mkt indications, Airbus’ billions of provision for corruption isn’t seen moving the
stock and same seems to go for Renault and its new CEO.
    
    (Julien Ponthus) 
     *****     
      
    
    MORNING CALL: CLINGING TO THE REBOUND (0645 GMT)
    European stocks are expected to cling to the wagon of yesterday's market rebound with a
little help from positive Q4 results from Europe Inc but also from Apple, which helped lift Wall
Street higher and later reported better than expected sales and profits.  urn:newsml:reuters.com:*:nL1N29X1VG    
    Things were left rosy in Asia where shares fell as a spike in new cases of the new
Coronavirus added to worries about the economic impact of the outbreak. 
    At the time of writing, futures point to a limited rise in shares of 0.1% to 0.2% and
financial spreadbetters expect London's FTSE to open 23 points higher, Frankfurt's DAX 27 points
up and Paris' CAC to gain 5 points.
    So far, the figures reported by Novartis, Telenor, Santander, KPN, SEB and Telia in this
busy earnings season session seem encouraging.
    That said, some investors might decide to stay cautious before the Fed meets later today.
    (Julien Ponthus) 
    ***** 

    
     
         
    


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 (Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)