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LIVE MARKETS-Europe opens flat as a pancake with sparkles

LIVE MARKETS-Europe opens flat as a pancake with sparkles

reuters.com · 09/02/2021 03:42
LIVE MARKETS-Europe opens flat as a pancake with sparkles

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EUROPE OPENS FLAT AS A PANCAKE WITH SPARKLES (0730 GMT)

The pan-European STOXX 600 opened just slightly in the black this morning amid an overall cautious mood weighing over global markets.

While the index is flat as a pancake with a 0.1% rise, that's not to say there are no sparkles.

Swedish Orphan Biovitrum (SOBI) is up a whopping 24% after receiving an $8 billion offer from U.S. venture capital firm Advent International and Aurora Investment.

Shares of Polish video games maker CD Projekt are also in the spolight, up 7.7%, after H1 results beat expectations.

Among losers, BHP is hard to miss, falling 5% in London after a 6.9% fall on the Australian stock market. BHP announced an exit from its $13 billion petroleum business in a portfolio shake-up that will see it leave London's FTSE100 index. nL4N2PO1OC

Miners are down 0.2% in Europe and tech stocks, which were the stars of yesterday's session are today's laggards with a 0.4% fall.

Across smaller caps, online trading platform CMC Markets fall about 26% after a profit warning as reduced market volatility resulted in lower transaction volumes across new and existing clients. Competitor IG Group also fell 5.8%.

Britain's biggest homebuilder Barratt Developments is losing a more modest 2.2% after saying it plans to increase the number of home completions in the current fiscal year to pre-pandemic levels. nL4N2Q41D0

Not much action for shares in France's Lagardere which are down a meagre 0.6% after big drops in previous days as luxury goods billionaire Bernard Arnault confirmed he was effectively cutting ties with the company's chief executive. nP6N2NJ02E

Talking about flat, Ryanair is up 0.2% after it said it flew 11.1 million passengers in August, 75% of the number the budget airline carried in August 2019 before COVID-19 pandemic hammered the industry.


(Julien Ponthus)

*****



CURRENCIES AT A CROSSROAD (0652 GMT)

Just a few weeks ago, it appeared that there was little that could knock a robust dollar. Fast forward, and uncertainty over the timing of Federal Reserve tapering is providing ammunition for dollar bears.

And recent days have seen the greenback undermined further as hawkish comments from a slew of European Central Bank policymakers have made investors sit up and sense signs of a shift in euro area monetary policy.

Don't forget the backdrop to the barrage of hawkish ECB talk was data showing consumer inflation in the currency bloc has surged to a 10-year high - challenging the view that price pressures are transitory.

Inflation is at risk of overshooting the ECB's projections, Bundesbank President Jens Weidmann said on Wednesday.

So no surprise then that the euro is trading near one-month highs above $1.18 EUR=, having recovered around 1.5% from 9-1/2 month lows hit less than two weeks ago. The dollar index is not far off its lowest levels in almost a month.

Euro area bond yields too have shot up DE10YT=RR.

Both data and central bank-speak will remain in the spotlight. Thursday's highlights include July U.S. industrial production, factory orders and trade balance data, along with the weekly initial jobless claims.

Concern about a slowdown in China, the world's number two economy, is keeping world equity markets in a cautious mood. Asian shares held just below five-week highs, while European and U.S. stock futures were marginally lower.

Bank of Japan board member Goushi Kataoka warned the coronavirus may weigh on the economy longer than initially expected, warning of heightened risks to the central bank's forecast of a moderate, export-driven recovery.

Elsewhere, oil prices fell after OPEC+ agreed to keep its policy of gradually returning supply to the market at a time when coronavirus cases around the world are surging and many U.S. refiners, a key source of crude demand, remained offline.


Key developments that should provide more direction to markets on Thursday:


- Australia trade surplus hits record in July as resources boom nAZN0M1W00

- Apple loosens App Store payment rules for Netflix, others in deal with Japan nL1N2Q400H

- U.S. venture capital firm Advent International and Aurora Investment offered to buy Sweden's SOBI for $8 billion

- Euro zone July PPI

- U.S. treasury auctions 4 week tbills

- U.S. earnings: American eagle, Hewlett Packard, Lulu Lemon


(Dhara Ranasinghe)

*****



EUROPE WAKES UP TO A CAUTIOUS MOOD (0619 GMT)

European stock futures are slightly in the red this morning after yesterday's gains and a subdued session in Asia where concerns about the Chinese economy are growing.

Wall Street futures are also in the same cautious mood ahead of the U.S. payrolls report due out on Friday.

There's a widening sense that global growth momentum is fading which is giving a boost to tech and other growth stocks at the moment.

Oil prices are going downward after OPEC+ agreed to keep its policy of gradually returning supply to the market at a time when coronavirus cases around the world are surging and many U.S. refiners, a key source of crude demand, remain offline.


(Julien Ponthus)

*****