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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 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: GOOD MORNING TRAVEL AND LEISURE! (0734 GMT)
Travel and leisure shares are clearly the main drivers of this morning's risk-on appetite
with the sector's pan-European up a whopping 4.6% after less than 10 minutes of trading.
Reports that Germany wants to end a travel warning for tourist trips to 31 European
countries from June 15 is clearly doing wonders.
Just have a look at the action at the top of the STOXX 600:
With banks up 2.9% and strong performances for autos, this session has all the
characteristics of a COVID-19 risk on session. Indeed, the only sector losing some ground is
healthcare with a 0.1% retreat. Cinema operator Cineworld, which has been seen as a fear and
greed gauge during the pandemic, is up 21%.
Most European bourses are up over 1% but London, which was closed yesterday, is catching up
with the FTSE 100 and is up 2%. The FTSE 250 is up 2.5%.
Capital markets seem to be quite confident with the current climate and Coffee company JDE
Peet's on Tuesday set an indicative price range of 30-32.25 euros per share for its initial
public offering (IPO), implying a market value of 14.9-16.0 billion euros.
(Julien Ponthus)
*****
ON THE RADAR: THAT LOCKDOWN EASING FEELING (0651 GMT)
The news flow this morning is all about lockdowns being gradually eased, with reports that
Germany wants to end a travel warning for tourist trips to 31 European countries from June 15,
the same date the UK wants non-essential shops to reopen.
Corporates are also making headlines with similar plans: shopping centre operator Klepierre
said it has re-opened 80% of its European malls and hopes to re-open 90% of them within 10 days.
French tire maker Michelin resumed operations at its two plants in Mexico on Monday.
There's also a fair amount of M&A headlines, but it's very different from pre-COVID-19 deals
in the sense that national governments are often in the driving seats.
After Germany stepped in and poured in billions into Lufthansa, France's national investment
bank, Bpifrance raised nearly 4.2 billion euros to shore up the capital base of big listed
French companies. There's growing speculation similar moves are to be expected in the UK.
Other news in M&A include Renault and Nissan shelving plans of a full merger and U.S.
drugmaker Regeneron Pharmaceuticals repurchasing about $5 billion of its shares from France's
Sanofi. Also, Siemens is planning to keep a 45% stake in its energy business which the German
engineering group wants to spin off later this year.
Some things don't seem to change however with France's business elite closing ranks around
publishing group Lagardere to bolster its defences against London-based hedge fund Amber
Capital.
Management issues are also in the news with BP more than halving the size of its senior
management team as part of Chief Executive Bernard Looney's drive to make the 111-year-old oil
company more nimble.
At Aston Martin, Tobias Moers, CEO of Mercedes-AMG, will become CEO on August 1, while at
EasyJet, chief financial officer Andrew Findlay will leave the company in May 2021.
Plumbing parts distributor Ferguson also said Mike Powell had stepped down as its finance
chief after three years in the role to take up the position of chief financial officer in
packing firm Mondi.
(Julien Ponthus)
*****
MORNING CALL: ALL CLEAR (0535 GMT)
With Asian stock markets ending their session well in the black and Wall Street futures
roaring ahead, there's little it seems to prevent European stocks starting the day on a clear
risk-on mood.
Futures are up above 1% for blue chips and in London, which was closed for a bank holiday
yesterday, it's over 2% for the FTSE 100 this morning.
For Chris Bailey, a strategist at Raymond James, the current optimism on markets is due to a
"combination of reopening realities, ongoing stimulus talk and vaccine hopes".
While the U.S./China tensions could in theory rattle markets, the continuous newsflow of
lockdown easings, such as Boris Johnson's announcing that thousands of UK high street shops
would reopen next month, is clearly encouraging.
And so is the Chinese central bank pledging to strengthen its economic policy and continuing
to push for lower interest rates.
(Julien Ponthus)
*****
(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)
