Live Markets: Opening snapshot: STOXX flat, DB move supports banks
08/07/2019 08:28
* European shares open little changed; STOXX 600 now up 0.1%
* Deutsche Bank starts 18,000 job cuts, shares up almost 4%
* Asian shares fall more than 1%
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger to share your
thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net
OPENING SNAPSHOT: STOXX FLAT, DB MOVE SUPPORTS BANKS (0727 GMT)
European shares are flat to slightly higher in early choppy trade as cooling rate cut
euphoria weighs on defensive sectors like utilities and healthcare, while banks are posting
gains after the big restructuring move at Deutsche Bank DBKGn.DE .
Deutsche Bank is squarely in focus with its shares rising almost 4% after the German
heavyweight started to axe 18,000 jobs globally in one of the biggest overhauls at an investment
bank since the aftermath of the financial crisis.
The restructuring could ease competitive pressure in the battered sector and that may be
helping the sectoral index sectoral post slight gains in ealy deals, up 0.2%.
Shares in other European investment banks UBS, Credit Suisse and Societe Generale are up
more than 1%, while Barclays is up 0.3% and HSBC is down around 1%.
Among top movers on the STOXX 600 are TGS Nopec TGS.OL , up 7.1% on a well-recived earnings
update while Sodexo EXHO.PA is down 3.1% after the French food services group warned that some
contract losses in North America would weigh on fourth-quarter growth, while lubricant maker
Fuchs Petrolub FPEG_p.DE is down 1.9% after a profit warning.
(Danilo Masoni)
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ON OUR RADAR: DB SEEN UP, POOR EARNINGS MAY WEIGH (0656 GMT)
European shares are set to start the week on the backfoot as Friday's strong U.S. jobs
report continues to temper some of the rate cut euphoria that helped lift the STOXX 600
benchmark to June 2018 levels. Futures are down 0.2-0.4%.
Deutsche Bank DBKGn.DE is up more than 5% pre-market trade as the German lender eliminated
whole teams at its Asian operations, starting to axe 18,000 jobs globally in one of the biggest
overhauls at an investment bank since the aftermath of the financial crisis. The stock has
recovered from the lifetime low hit in June but is down more than 92% from the 2007 record high.
One trader says he would sell Deutsche shares on strength.
Banks too could get a lift from DB's big restructuring as the move could help ease
competitive pressure on the battered sector, also hit by years of ultra-loose monetary policy.
Elsewhere on the corporate front, earnings are starting to trickle in, and mostly don’t look
too positive.
Lubricant maker Fuchs Petrolub FPEG_p.DE is down 7.3% in early Frankfurt trade after the
company posted a profit warning on Friday. That could also weigh on sector peer Elementis and
Johnson Matthey, Solvay and Umicore, traders say.
French food services group Sodexo EXHO.PA could be hit after it warned that some contract
losses in North America would weigh on fourth-quarter growth, even though sales growth
accelerated in the third quarter. Sodexo shares seen opening down 1-2%.
A 2019 guidance cut at Bam Groep BAMN.AS is seen sending shares down 5% at the open, one
trader says. Imperial Brands, instead, could get a lift after announcing a dividend policy
change and a 200 million pounds ($250 million) share buyback. Shares are seen rising as much as
4% at the open.
British Airways owner IAG ICAG.L is seen opening down 2% as UK regulators threatened a
£183.4 million penalty related to data theft.
Eyes also on Greek stocks, after Greece's opposition conservatives returned to power with a
landslide victory in snap elections on Sunday. Turkey-exposed stocks could also be in focus
after President Tayyip Erdogan, a proponent of lower interest rates, dismissed central bank
governor Murat Cetinkaya.
(Danilo Masoni)
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DEUTSCHE BANK IN FOCUS, EARNINGS START TO TRICKLE IN (0558 GMT)
Deutsche Bank DBKGn.DE will be squarely in focus this morning and in the following weeks
with its shares rising pre-market as the German lender started cutting 18,000 jobs globally in
one of the biggest overhauls at an investment bank since the aftermath of the financial crisis.
urn:newsml:reuters.com:*:nL4N2490YY
Its shares -- indicated to open 5.2% higher according to pre-market data from brokerage Lang
& Schwarz -- have recovered from the 5.8 euro record low hit at the start of June but remain
down than 92% from the all-time high hit in May 2007.
"Some might give Deutsche Bank new credit after massive restructuring announcement; most
might stay on the sidelines which was the best strategy in last years," says a Frankfurt based
trader, adding: "Would sell DBK shares into strength!".
Elsewhere on the corporate front, earnings news is starting to trickle in.
Sulzer SUN.S CEO told Reuters that Swiss pump maker has seen no slowdown in customer
inquiries and could raise its full-year sales forecast despite gloomy industrial data and an
ongoing trade war. urn:newsml:reuters.com:*:nL8N2490D6 In France, Sodexo EXHO.PA said sales growth accelerated in Q3
but warned that some contract losses in North America would weigh on Q4 growth. urn:newsml:reuters.com:*:nP6N21M012
Here's your early morning headlines roundup:
Italy's Newlat plans to list in Milan in autumn - chairman urn:newsml:reuters.com:*:nL8N2463VL
Virgin-Flybe UK airline deal gets EU clearing, to cede slots urn:newsml:reuters.com:*:nL8N24637H
TIM to extend 5G services to 6 more Italian cities by year-end urn:newsml:reuters.com:*:nL8N24635K
Fuchs Petrolub Says Recovery In Second Half Of 2019 Not Visible urn:newsml:reuters.com:*:nFWN2450LR
(Danilo Masoni)
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EUROPE SEEN OPENING LOWER (0536 GMT)
European shares are expected to start the week on the back foot after a strong U.S. jobs
report on Friday tempered expectations of an aggressive interest rate cut by the Federal Reserve
later in July.
Spreadbetters at IG expect London's FTSE to open 7 points lower at 7,546, Frankfurt's DAX to
open 45 points lower at 12,524, and Paris' CAC to open 14 points lower at 5,579.
Over in Asia, shares fell with MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS last down 1.4%. lost more than 1%, while Japan's Nikkei .N225 was down 1%.
Meanwhile, Deutsche Bank DBKGn.DE eliminated whole teams at its Asian operations today, as
the German lender began axing 18,000 jobs globally in one of the biggest overhauls at an
investment bank since the aftermath of the financial crisis. urn:newsml:reuters.com:*:nL4N2490YY
(Danilo Masoni)
*****
($1 = 0.7987 pounds)
((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))