Reuters Insider - Reuters Today: European shares slide as PMI data fails to impress

Kapsch TrafficCom AG

02/01/2019 16:01

Click the following link to watch video: https://share.insider.thomsonreuters.com/link?entryId=1_f5s9hjet&referenceId=1_f5s9hjet&pageId=ReutersNews
Source: Reuters Insider

Description: European stocks fell on the first trading day of the year, as
economic data out of China and Europe pointed to a worsening of manufacturing
activity. Meanwhile the ECB has stepped in to take over control of troubled
Italian lender Banca Carige.
Short Link: https://reut.rs/2LHLJp2

Video Transcript:

Good morning and welcome to Reuters Today. I'm Matt Gooderick. Markets across
Europe have started the New Year with a dose of the blues really. Fears of a
global growth slowdown, trade wars, rising US interest rates and political
instability have rolled over into 2019. The STOXX 600 is down by more than one
and a half percentage points. That uncertainty is taking its toll on the oil
and mining-heavy FTSE 100 - which is down by more than 1.7%. While Paris's CAC
40 is down by more than 2% - set for its worst day since December 6. All this
follows further signs of a slowdown in the world's second largest economy,
China, where manufacturing activity contracted for the first time in 19
months. Added to concerns about slowing growth is the ongoing tit-for-tat
trade war between China and the US, which has seen tariffs imposed on billions
of dollars in goods. Here in Europe, PMI data for December gives little cause
for optimism really. Eurozone manufacturing activity barely expanded at the
end of 2018 in a broad-based slowdown. In Italy, the number was slightly
better than expected but still showed a contraction in manufacturing activity.
In France, the number also showed a contraction, albeit a slight one. In
Germany, the 51.5 figure was as-expected and is the same as the previous
month. For the eurozone, the 51.4 reading was bang on economists'
expectations, but barely above the level that separates expansion from
contraction. Let's take a closer look at how some individual stocks have been
performing this morning then. The gaming software company Playtech has been
landed a EUR28 million tax bill by the Israeli authorities - sending its
shares down by as much as 2.3 percent - although they have recovered some
ground. Mining stocks such as BHP are on the back foot as 2019 kicks off with
worries about global demand. That uncertainty is also taking its toll on
airline stocks. IAG - the owner of British Airways, Iberia and Aer Lingus - is
among the biggest decliners. Still - amidst the gloom - there are a few bright
spots. A consortium of companies, including Austria's Kapsch Trafficom is to
take over the running of Germany's toll-road system. The German carrier
Lufthansa says it may step in to fill the breach if Thomas Cook's Condor
Airlines quits the Frankfurt hub, as expected. Lufthansa taking trading
roughly flat this morning. British 10-year bond yields have fallen to a
three-week low, prices are getting support from the decline in equities, as
well as a fall in eurozone borrowing costs after Italy succeeded in passing a
budget. Ten-year yields hit their lowest since December 12th. Yields on other
maturities also fell. Oil fell on the first trading day of 2019, pulled down
by soaring output in the US and Russia, as well as those concerns about
slowing global growth. Both Brent and WTI futures are lower, down over 1%.
China has cut its crude import quotas for 2019 to 90 million tons, that's a
significant cut from the 121 million tons last year. The European Central Bank
has taken over the administration of Italy's troubled Banca Carige. It's
appointed three commissioners to run the lender - after it failed to raise
funds last month. Carige's Chairman and two other directors have resigned. The
bank failed to win shareholder backing for a EUR 400 million share issue that
was part of a plan to prevent it from collapsing. Investors will gain a
clearer picture of retailers' performances over the crucial Christmas period
later in the week. Initial data from Springboard, a retail consultancy, showed
that footfall in the week to Saturday fell by around 3% compared with last
year. In-store shopper numbers on Boxing Day fell by 3.1% year-on-year - the
third consecutive annual decline. John Lewis will report its performance for
the previous fortnight, while Next will publish trading figures to 24th
December on Thursday. British retailers had already suffered a difficult 2018,
with a raft of store closures announced by major chains including Marks &
Spencer and Debenhams. That's it for now - I'm Matthew Gooderick, and this is
Reuters