Live Markets: Volatility picks up, STOXX dips

Chr Hansen Holding A/S

12/12/2022 09:12

* 
      STOXX down 0.7%, volatility at 1-month high
    

        * 
      Caution ahead of central bank meetings
    

        * 
      CHR Hansen rallies on Novozymes merger
    

        * 
      U.S. stock index futures soft
    

  
Welcome to the home for real-time coverage of markets brought to
you by Reuters reporters. You can share your thoughts with us at
    VOLATILITY PICKS UP, STOXX DIPS (0906 GMT)
    Caution over a flurry of fresh rate hikes this week, which
will tighten financial conditions even further, was tangible in
early trading in Europe with a gauge of equity volatility
hitting a one-month high as the STOXX 600 benchmark slid.
    The pan-European index  .STOXX  was last down 0.7%, partly
reversing Friday's gains, and the euro volatility index  .V2TX ,
a local equivalent of Wall Street's so-called fear gauge VIX
 .VIX , approached 23 points and hit its highest since Nov. 10.
Most STOXX sectors were in the red, led by rate-sensitive real
estate  .SX86P , down more than 2%.
    Deal-making gave fuel to the biggest stock movers. CHR
Hansen  CHRH.CO  soared 36% at one point after the Danish food
ingredients and enzymes maker was valued at a premium in a
merger deal with peer with Novozymes  NZYMb.CO . 
    London Stock Exchange  LSEG.L  was the second biggest gainer
on the STOXX, up around 4%, following a cloud deal with
Microsoft that saw the U.S. tech group taking a stake in the UK
bourse operator.
    Momentum continued for aerodefence plays set to benefit from
higher military spending. A sectoral gauge  .SXPARO  surged to
its highest since February 2020, up 0.8% to defy the broader
weakness.  Here is your opening snapshot:            
        (Danilo Masoni)
  
        *****
  
    EUROPE SEEN WEAKER AS MORE RATE HIKES LOOM (0740 GMT)
    European shares are set to kick off a macro-packed week on
the back foot, tracking Friday's late losses on Wall Street and
weakness earlier in Asia, where spreading COVID cases in China
added to the downbeat mood.
    EuroSTOXX50  STXEc1 , DAX  FDXc1  and FTSE  FFIc1  futures
fell between 0.3 and 0.5%, while the MSCI's broadest index of
Asia-Pacific shares outside Japan  .MIAPJ0000PUS  fell 1.3%.
U.S. futures meanwhile pointed to softer start on Wall Street.
    On the European corporate news front, shares in London Stock
Exchange  LSEG.L  will be in focus after Microsoft  MSFT.O 
agreed to take 4% in the UK exchange operator as part of deal to
migrate the bourse operator's data platform into the cloud.
    Eyes also on Sanofi  SASY.PA  after the French health group
dropped plans to bid for Horizon Therapeutics  HZNP.O , while in
Italy, Tod's  TOD.MI  founder ditched plans to delist the
shoemaker after a buy-out that didn't meet a key threshold.  
    Still in M&A, Superdry  SDRY.L  is another one to watch
after the Sunday Times reported CEO and founder Julian Dunkerton
has held talks with private equity firms about a possible
buyout. 
    (Danilo Masoni)
    *****
    HUNKERING DOWN (0659 GMT)
    Just as China faces a testing time over its dramatic
COVID-19 policy pivot, financial markets are on full alert ahead
of interest rate decisions coming out this week from the world's
top central banks.
    Initial market enthusiasm over China's easing of its
stringent "zero-COVID" measures has now switched to worries over
a wave of infections likely disrupting the economy.
    European stock markets are set for a weaker start on Monday,
dragged by declines in Asian stocks, with the spotlight on a
series of central bank meetings even as expectations rise that
euro zone inflation is peaking.
    The European Central Bank is set to take its deposit rate up
by 50 basis points to 2%, despite the euro zone economy almost
certainly being in recession, as it battles inflation running at
five times its target, a Reuters poll found.
    It's a Super Thursday this week, with the ECB, Bank of
England, and the Swiss and Norwegian central banks also expected
to jack up borrowing costs. What markets are keen to find out is
whether they are nearly done.
    On Sunday, U.S. Treasury Secretary Janet Yellen forecast a
substantial reduction in U.S. inflation in 2023, barring an
unexpected shock.
    Whether inflation is responding to the most aggressive Fed
hiking cycle since the 1980s will be evident in this week's U.S.
consumer price index report.
   On the corporate front, while French health group Sanofi
 SASY.PA  announced it had dropped its bid for biotech company
Horizon Therapeutics  HZNP.O , the Wall Street Journal reported
that Amgen  AMGN.O  is in advanced talks to buy Horizon.
    Meanwhile, a consolidation is shaping up in the food
delivery market as Turkish delivery company Getir bought German
rival Gorillas in a deal worth $1.2 billion, merging two of the
remaining companies in Europe promising groceries in minutes.
    Key developments that could influence markets on Monday: 
    Economic data: UK October GDP and industrial output
    (Anshuman Daga)
    *****
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
eu open    https://tmsnrt.rs/3hksTsu
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>