Live Markets: European real estate at relative record low
28/03/2023 10:18
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STOXX 600 up 0.1%
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Oil stocks lead gainers
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Real estate slides further
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S&P 500 futures steady
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EUROPEAN REAL ESTATE AT RELATIVE RECORD LOW (0918 GMT)
A sense of stability has finally returned to markets as a
turbulent month draws close to an end, but pressure on European
real estate stocks shows no sign of abating, possibly hinting at
fresh bouts of volatility further down the road.
Their sectoral index .SX86P tumbled to its lowest level in
11 weeks and was last down 2.2% on the day. Top faller was
Germany's Aroundtown AT1.DE , down more than 11%, followed by
Swiss Prime Site SPSN.S , LEG Immobilien LEGn.DE , SBB
SBBb.ST and Vonovia VNAn.DE , all down around 4%.
"Investor exodus continues," notes a Frankfurt trader.
The real estate milestone looks even starker when
benchmarked to the broader market. Relative to the STOXX 600
.STOXX , the STOXX Europe 600 Real Estate index was down to a
fresh lifetime low.
More reading: Europe's real estate faces 50% potential
downside - Citi
(Danilo Masoni)
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FINANCIALS AND ENERGY PROP STOXX UP (0756 GMT)
Strength across financial and energy stocks was giving a
welcome boost to European shares in early trading on Tuesday,
lifting the STOXX 600 further away from the multi-week lows hit
earlier this month on angst over bank stability.
The pan-European equity benchmark .STOXX was last up 0.6%,
rising for a second straight day with bank .SX7P and oil
.SXEP both up 1.5%. Highly leveraged real estate .SX86P
stayed near its lowest levels since October, down 0.6%.
Tech .SX8P was another weak spot, down 0.2%.
Here's your opening snapshot:
(Danilo Masoni)
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EUROPE SET TO OPEN HIGHER (0638 GMT)
Shares in Europe were expected to open a touch higher on
Tuesday, as no fresh bad news in the banking sector gave a boost
to risk sentiment, following a deal over failed Silicon Valley
Bank that eased some worries over the sector's stability.
Euro STOXX 50 and FTSE futures rose around 0.6%, while euro
STOXX banks futures gained 1.5%. Easing fears about the banks
propped up Asian stocks, while S&P 500 futures pointed to
another positive session on Wall Street and were last up 0.3%.
On the corporate front, eyes were on the latest batch of
earning updates, including from online supermarket Ocado Retail
and housebuilder Bellway in the UK. Diageo said its CEO Ivan
Menezes will retire after nearly a decade at the helm, passing
the baton to COO Debra Crew.
Tourism group TUI was in focus on the first day of trading
for rights in its 1.8-billion euro share sale, while reports
that Germany was looking to boost military aid to Ukraine could
give a further lift to defence company Rheinmetall.
(Danilo Masoni)
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CALM RETURNS: INVESTORS SWITCH TO BANK FUNDAMENTALS (0553
GMT)
Turbulence in global markets is gradually giving way to
stability.
A day after regional U.S. lender First Citizens BancShares
moved to scoop up the assets of failed Silicon Valley Bank,
brave investors can probably begin to ask, "Is the worst over?"
A strong show of confidence is coming from U.S. authorities
as bank regulators say the system is sound but rules need
review.
A recover in U.S. markets, especially in beaten-down bank
shares, lifted Asian stocks on Monday while the safe-haven
dollar declined. Australian stocks outperformed, boosted by M&A
activity.
The relief rally in Asian equities could extend to Europe,
where banking shares rose on Monday, paring last week's sharp
declines.
A state-orchestrated rescue of Credit Suisse CSGN.S by
rival UBS UBSG.S and turmoil among regional U.S. banks have
fuelled concerns for the sector.
But analysts at asset manager Amundi say recession fears are
the main culprit and European banks are not lumbered with weak
assets that would pose challenges to capital or liquidity
levels.
While the analysts expect a continuation of declining credit
growth which is consistent with monetary tightening, they don't
expect any credit crunch.
"Most European banks have plentiful capital and liquidity to
support the real economy: We expect them to remain open for
business and to continue extending loans to creditworthy
customers."
The European Central Bank's board member Isabel Schnabel
said on Monday the ECB could take a leaf from the Bank of
England's book as it looks for new ways of managing liquidity in
the banking sector and steering short-term interest rates in the
market.
In Germany, millions of people were disrupted on Monday as
airports and bus and train stations across the country came to a
standstill during one of the largest walkouts in decades in
Europe's biggest economy as soaring inflation stoke wage
demands.
Meanwhile, a U.S. regulator sued Binance, the world's
biggest crypto exchange, and its CEO and founder Changpeng Zhao
for what the regulator alleged were an "illegal" exchange and a
"sham" compliance programme. Zhao called the complaint
"unexpected and disappointing."
Key developments that could influence markets on Tuesday:
Speakers: Federal Reserve Vice Chair for Supervision Michael
Barr testifies on "Bank Oversight"
European speakers: ECB President Christine Lagarde gives a
speech at an opening ceremony of BIS Innovation Hub Eurosystem
Centre in Frankfurt; Andrew Bailey, BoE governor Banking at Bank
of England participates in a Treasury Select Committee hearing
on Silicon Valley Bank
(Anshuman Daga)
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US stocks regain losses since Silicon Valley Bank collapse https://tmsnrt.rs/3ntEnwE
EU open https://tmsnrt.rs/3KfmZnW
RE record low https://tmsnrt.rs/3nnNG0W
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