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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 Joice Alves
(joice.alves@thomsonreuters.com) and Julien Ponthus
(julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo
(stefano.rebaudo@thomsonreuters.com) in Milan.
OPENING SNAPSHOT: AIRLINES SELLOFF AFTER UK MOVE ON SPAIN (0747 GMT)
European stocks are in the red as a UK warning against flights to Spain hit
travel and leisure shares across the continent.
Shares in EasyJet, British Airways’ parent company IAG, TUI
and Ryanair < RYA.L> are the worst performers of the Stoxx 600 index
down 8.9% to 13.2%, after the Britain government advised against all
non-essential travel to mainland Spain.
But not just UK stocks are under selling pressure. Lufthansa
shares are falling by 6.4%, Air France by 3.3%.
Germany’s Dax index is flat, with shares in SAP rising 2.9% after
the company said it planned to float Qualtrics.
The Stoxx 600 index is down 0.4%, with travel and leisure stocks leading
losses, down 3.4%.
Hopes of a quick recovery in Europe due to better results in fighting the
pandemic and to the approval of the EU recovery fund did not fade yet, but
investors prefer to stay in a wait and see mode, at least for now.
Today's data includes the German Ifo Business Climate Index as well as
eurozone broad money M3, which will show by how much bank credit to corporations
is expanding.
(Stefano Rebaudo)
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ON THE RADAR: SAP, UK AIRLINES, KPN (0636 GMT)
European bourses are poised to open almost flat as concerns about the impact
of the pandemic on the global economy and U.S.-China tensions cloud hopes of a
quick recovery in Europe.
On the corporate front, SAP shares are up 3.1% in early trade
after the company said it planned to float Qualtrics, the U.S. specialist in
measuring online customer sentiment, which it acquired in late 2018 for $8
billion. SAP confirmed its guidance and posted a Q2 operating profit up 7% in
constant currency.
EasyJet and British Airways told customers on Saturday they
did not plan to cancel flights, after Britain's government advised against all
non-essential travel to mainland Spain due to COVID-19.
Earlier on Saturday Europe's largest tour operator TUI
said it was cancelling all holiday departures scheduled for Sunday.
Ryanair reported a narrower than expected loss in Q1 and said it was
impossible to say whether it might turn an annual profit.
KPN expects its core profits to at least remain stable over 2020.
Steinhoff shares are up 16% in early trade after the company
announced settlement to conclude litigations proceedings.
Italian state lender Cassa Depositi e Prestiti (CDP) could buy a controlling
stake in Atlantia's motorway unit Autostrade in an initial public
offering. Earlier this month the Italian government reached a preliminary
compromise that left Autostrade with its motorway concession but forced Atlantia
to hand over control to state lender CDP and allied investors.
AstraZeneca could pay up to $6 billion to Japan's Daiichi Sankyo as
part of a new collaboration to develop and market a type of potential cancer
treatment for multiple tumour types.
Atos aims at revenue growth of 5-7% in the medium term.
Faurecia expects to return to profit and cash generation in the
second half of the year on the back of cost controls, after reporting an
operating loss in the first half.
(Stefano Rebaudo)
*****
MORNING NOTE: SLIGHTLY IN THE BLACK AND CAUTIOUS (0528 GMT)
European futures are in positive territory, but no clear trend is emerging
yet, as virus worries coupled with U.S.-China tensions keep investors' mood in
check.
The market is looking to corporate earnings for hints on the pace of
recovery, but the outlook in the U.S. remains a major concern as coronavirus
cases continue to rise, while a new stimulus package has still to be approved by
Congress.
Asian bourses were mixed overnight supported by tech stocks, despite the
U.S.-China spat that led to consulate closures in both countries.
(Stefano Rebaudo)
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