Newscasts - Europe Markets Briefing: European shares drift as U.S. CPI, ECB loom

United Rentals

10/12/2024 16:01

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Source: 'Reuters - Business videos'

Description: European share markets failed to build on the previous day's
gains driven by China stimulus hopes, as investors sat on the sidelines ahead
of U.S. inflation data on Wednesday, and the ECB policy meeting on Thursday.
Short Link: https://refini.tv/49tn7eA

Video Transcript:

European shares lose steam ahead of the ECB. Welcome to Europe Markets
Briefing. I’m David Pollard. European shares have drifted today, failing
to build on the previous day's gains, driven by China stimulus hopes. The main
events of the week are still to come, with the US inflation data on Wednesday
and the ECB policy meeting on Thursday. An ECB rate cut is seen as all but
certain, and ahead of that, Sterling rose against the Euro towards its highest
level in over two and a half years. The Bank of England is seen keeping its
current policy stance next week. Traders are also leaning towards a
50-basis-point cut in Switzerland on Thursday as authorities there may attempt
to put the brakes on the Frank’s relentless rise against the Euro. In
corporate news, Stellantis and China's battery maker CATL said today they'll
invest EUR4.1 billion to build one of Europe's largest EV battery factories in
Spain. The 50-50 joint venture in Zaragoza is expected to start production by
the end of 2026 and could have enough capacity to power an average 700,000
cars a day. British stocks saw their first monthly inflow in five years in
November, potentially marking a turning point as cheap valuations, political
stability and the UK's relative immunity to escalating trade tensions lure
investors. According to Lipper data, UK equity funds saw inflows of $779
million. But in a blow to UK stock markets today, Ashtead Group is proposing
to shift its primary listing to the US. The equipment rental firm said it
would discuss the proposal with shareholders and expects the plan to be
implemented in the next 12 to 18 months. The company also warned of lower
annual profits pushing shares down over 8% earlier. So would a US listing be a
good move?

Firstly, remember that 90% of Ashtead's business is in the US. Sometimes we
say that companies want to relist in the US because they would command a
higher valuation. In fact, Ashtead do trade a slightly elevated multiple
compared to their biggest rival there, which is United Rentals. So that's
probably not the motivation. It probably is because the CEO is a resident
there.

In other news today, British shoppers faced increased pressure on their
budgets in November after grocery price inflation edged higher for the third
month in a row, according to industry data. Market researcher Kantar said
annual gross price inflation was 2.6%, up from 2.3% in the prior period.
Prices are rising fastest in products such as toothbrushes, chilled smoothies,
and juices and fragrances. Looking ahead, Inditex earnings top Wednesday's
corporate diary. Shares in the retail giant were upgraded last week by
Deutsche Bank and Barclays, with Deutsche Bank noting a justified premium
valuation due to higher price points. That is Europe Markets Briefing