Live Markets: European shares tick higher but sentiment wary
10/05/2022 08:56
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EUROPEAN STOCKS TICK HIGHER BUT SENTIMENT WARY (0747 GMT)
After four days of screens flashing red, European shares are
gaining this morning, with STOXX up 0.7%.
The rise is modest since the pan-European index remains at
near two-month lows.
Automobiles and parts .SXAP are ahead, rising 1.9%,
followed by construction and materials .SXOP , up 1.8%.
Only healthcare .SXDP and oil and gas .SXEP are lower
this morning, down 0.1% and 0.4% respectively.
Soaring Swedish Match SWMA.ST shares are at the top of the
index today, up 25% after U.S. rival Philip Morris International
Inc said it was in talks to buy the Stockholm-based tobacco
products company.
Poland's Dino Polska DNP.WA is a not so close second, up
6.9%.
Norway's Kongsberg Gruppen KOG.OL is falling 8.5% as
shortages and logistical issues weighted on its Q1 results.
(Lucy Raitano)
*****
WAITING FOR CHINA (0732 GMT)
Earlier this year, investors' fears of an aggressive Fed
rate hike cycle were tempered by signs China was looking to ease
policy. That would offset, at least partly, Fed tightening, the
reasoning went.
Instead, Beijing has more or less sat on its hands, offering
the odd pledge of policy support, as it did on Monday. Despite
dismal economic data, it is not flinching at locking down
swathes of cities against COVID, and it has not blocked the
yuan's descent versus the dollar to 19-month lows.
Aside from questions around how bad things might be inside
the world's No. 2 economy, another risk, highlighted by
long-standing China bull BlackRock, is that of fresh tensions
with the West around Beijing's tacit support for Russia.
BlackRock said on Monday it had trimmed China exposure.
With economic growth concerns displacing inflation in
markets' psyche as the biggest worry, the S&P 500 closed under
400 points for the first time in a year, oil is extending
Monday's 5% fall and bond yields have slipped.
For Tuesday, an equity bounce may be on the cards, with U.S.
futures tipping a firmer Wall Street session and European stocks
are opening higher.
It could of course be all about technicals. Bearish S&P 500
positioning has been near record highs, Citi data shows, and at
two-year highs for European blue chips. Having benefited from
recent market falls, some bears may look to deploy those
profits, Citi reckons.
Data just out shows UK shoppers cutting back on spending.
and now the wait is on for Germany's ZEW investor sentiment
index.
Later in the day, a raft of speeches from Fed officials will
be perused to gauge whether 75 basis-point rate hike
installments remain on the table. Or conversely, for any sign
the Fed is taking note of economic growth worries.
Key developments that should provide more direction to
markets on Tuesday:
- EXCLUSIVE-Germany prepares crisis plan for abrupt end to
Russian gas urn:newsml:reuters.com:*:nL5N2WY4A3
- Sony's Q4 operating profit more than doubles urn:newsml:reuters.com:*:nL2N2X20BG
-Bank of England Monetary Policy Committee member Michael
Saunders
-Fed speakers: Minneapolis Fed's Neel Kashkari, Fed governor
Christopher Waller; New York Fed's John Williams; Atlanta Fed's
Raphael Bostic, Cleveland Fed's Loretta Mester
-ECB Vice President Luis de Guindos
-U.S. Treasury 3-year note auction
-Romania central bank may hike rates by 100 bps to 4%
-U.S. earnings: 20th century Fox, Occidental
-European earnings: Bayer, Munich Re, Endesa
(Sujata Rao)
*****
EUROPEAN SHARES SET TO GAIN AFTER HEAVY SELLING: (0627 GMT)
European futures show stocks clawing black some of the last
week's steep losses, even as Asian shares slid to their lowest
level in two years overnight.
Futures for the pan-European STOXX index .STXEc1 and
German futures .FDXc1 are about 1.2% up while FTSE futures
FFIc1 are less bullish, 0.5% higher.
After four days of heavy selling, the STOXX 600 to its
lowest level since early March on Monday, while U.S. stocks also
plunged amid fears that the Fed's tightening policy won't be
enough to curb inflation. Asian shares continued the downward
slide, and commodity prices also declined on Monday.
In European company news, Philip Morris International is in
talks to buy rival Swedish Match urn:newsml:reuters.com:*:nL3N2X12Z1 and Italian energy
services group Saipem is working to bring forward a planned 2
billion euro ($2.12 billion) capital increase and carry it out
in the summer, CEO Francesco Caio told Italian newspaper Il Sole
24 Ore. urn:newsml:reuters.com:*:nL5N2X21AD
Ramifications of the conflict in Ukraine continue to
dominate, with German officials are preparing for any sudden
halt in Russian gas supplies with an emergency package that
could include taking control of critical firms urn:newsml:reuters.com:*:nL2N2X11OK.
(Lucy Raitano)
*****
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