Last checked at 
* Shares turn lower
* Bank of Ireland shares down 14.8%
* Italian banks are outperforming
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts with Thyagaraju Adinarayan
(thyagaraju.adinarayan@thomsonreuters.com), Joice Alves (joice.alves@thomsonreuters.com) and
Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo
(stefano.rebaudo@thomsonreuters.com) in Milan.
ITALIAN BANKS ARE OUTPERFORMING
The Italian banking sector is outperforming its peers across Europe on Monday as
better-than-expected financial results and possible dividend payments lift sentiment.
Ratings agency Moody's, leaving the country's credit outlook at 'stable' and its rating at
'Baa3' one notch above junk territory, was a relief for lenders with big amounts of
Treasury notes in their portfolios.
The Italian banking stock index is up 0.6%, compared to a 1.8% loss in the Euro
Stoxx Banks index.
"It is mostly about Q1 results, which in many cases were stronger than expected and the
possibility of dividend payments later this year," says Luca Rubini, managing director in Milan
of Spanish investment firm Fidentiis.
Last week heavyweight Intesa Sanpaolo reported a surprise 10% rise in first-quarter
net profit thanks to strong trading gains. While annual profit is set to fall sharply, it
planned to pay out 75% of 2020 profit as dividends if regulators allow it.
Its rival Unicredit, which bowed to regulator pressure and froze the dividend
payment, said last week it would assess its decision in Q4.
UBI Banca said it was ready to pay dividends on 2019 results if authorities allowed it.
(Stefano Rebaudo)
TECH AND DEFENSIVES IN THE SPOTLIGHT, FOR NOW (1200 GMT)
Inflation risk is not highly topical these days with the world facing a steep recession due
to lockdowns, but the huge amount of stimulus which has been flooding into the economy and
financial markets could raise some questions.
Could "extreme amounts of stimulus" result in overheating when we get back to something that
resembles normality?
JP Morgan Cazenove says it is getting a number of queries along these lines.
The investment bank does not rule out a reflationary effect, triggering a rotation which
would put an end to the strong performance of growth and quality stock, but not quite yet.
"The more durable reflation trade could happen from Q4, and in the meantime tech &
defensives are likely to stay the winners," it says.
(Stefano Rebaudo)
*****
THAT SPRING OPTIMISM... WATCH OUT!
Stock markets are pricing in a V-shaped recovery, but it might be the case to avoid letting
emotions carry you away.
The coronavirus crisis has created such levels of uncertainty, that investors might current
be way "too optimistic" as they try to make sense of what is happening to the global economy,
says NN IP in a note.
"When the market outlook is so volatile," NN IP says, "investors often fall prey to emotions
and biases that result in suboptimal investment decisions".
One of the reasons for improved sentiment might be the way news and social media are
analysed using natural language processing (NLP) to rapidly extract, aggregate and categorise
large volumes news and social media feeds, NN IP says.
Equity investors are pricing in a V-shaped recovery, owing to improving medical data on
COVID-19 and the cash central banks pumped into the economies.
"This represents a disconnect from the real economy in which people’s fears for their
health, jobs and a second wave of coronavirus infections will persist for some time," the Dutch
asset manager adds.
(Joice Alves)
*****
OPENING SNAPSHOT: EASYJET AND WIRECARD STEAL THE SHOW (0755 GMT)
European bourses are all nicely trading in the black this morning as investors are hopeful
the easing of some lockdown measures will bring a revival in business activity across Europe.
France opens shops today after weeks of lockdown while the UK PM Johnson said on Sunday the
lockdown will not end yet, but he announced some easing of restrictions encouraging people that
can't work from home -especially in the manufacturing and construction sectors- to return to
work.
Britain's blue chips and midcaps are also catching up with some Friday's
gains as the London stock exchange was closed for a bank holiday on Friday when easing tensions
between the world's two largest economies and better than expected U.S. unemployment data lifted
markets in Europe.
The pan-Euroean index is up 0.5% with basic resource companies leading the
gains.
In terms of single stocks, EasyJet shares tumbled 7.1% to the bottom of the FTSE 100
and the STOXX 600 as Johnson said the UK would soon need to quarantine people flying into the
country to prevent a coronavirus infections from abroad.
At some point this morning, shares in Wirecard jumped 12%, it is now up 9% at the top of the
STOXX 600 after a management reshuffle.
(Joice Alves)
*****
ON THE RADAR: AIRLINES, HENKEL AND LAFARGEHOLCIM (0650 GMT)
European futures are pointing to a higher open as more countries get ready to ease some of
the coronavirus lockdown measures.
In the corporate front, there’re some positive results: Henkel, the maker of
Persil detergent and Schwarzkopf shampoo, reported a big jump in Q1 sales of laundry detergents
and household cleaners, which offset sales in coronavirus-hit adhesives and beauty care
divisions.
Leg Immobilien has confirmed its 2020 earnings forecast after Q1 results.
Meantime, other corporates struggle to see some clarity, Nordex said it is not
sure when it could issue a new 2020 outlook.
More pressure on airlines: easyJet urged the UK to keep any quarantine requirements
on travellers arriving in the UK for only a short period, as airlines face a new threat to their
survival after British PM said yesterday that a quarantine will soon be needed for people flying
to the country to prevent infections from abroad.
In the M&A front, LafargeHolcim's deal to sell its $2.15 billion Philippines
business to industrial group San Miguel Corporation fell through.
Thyssenkrupp said it has less time for its restructuring plan than expected as
"the difficult economic situation at Thyssenkrupp is being significantly intensified by corona",
its CEO said in a note to staff.
(Joice Alves)
*****
EYES ON EASING LOCKDOWNS (0540 GMT)
European futures are pointing to an open in the black as more European countries get ready
to ease some of the coronavirus lockdown measures, even as Germany reported a pick up in new
cases just days after its leaders loosened social restrictions.
In France, shops and hair salons can reopen today after eight weeks of lockdown.
. In the UK, PM Boris Johnson said on Sunday the COVID-19 lockdown will not end yet
but some 'careful' easing will begin.
Stocks are seen continuing on the positive vibe seen on Friday when easing tensions between
the world's two largest economies and better than expected U.S. unemployment data lifted
markets.
(Joice Alves)
*****
(Reporting by Joice Alves, Julien Ponthus, Stefano Rebaudo and Thyagaraju Adinarayan)
