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Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share
your thoughts on market moves: thyagaraju.adinarayan.thomsonreuters.com@reuters.net
SWEET FIRST SESSION FOR EUROPEAN BOURSES (1705 GMT)
European bourses closed the day in positive territory as they got a boost from the news that
China's central bank is cutting the amount of cash that all banks must hold as reserves,
releasing around 800 billion yuan ($114.91 billion) in funds to revive the economy.
The pan-European index was up 1% and the euro-zone blue chip index was up 1.37% at
the end of the session, led by banks up 2%. Some of the top performers include
Commerzbank, Deutsche Bank and Banca Santander.
Traders are also cheering a possible end of the U.S.-China trade war after Trump tweeted
that a pact with Beijing will be signed this month.
Here is a snapshot of the European bourses at 4.45pm London time.
(Joice Alves)
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BANK STOCKS ON FIRE (1100 GMT)
There is a clear trend on day one of 2020 in stock markets: cyclical stocks are in demand.
Banks, autos and mining stocks are rallying hard taking the pan-European STOXX 600
closer to yet another record high.
Among banks, Commerzbank and Deutsche stand out as they had lagged rest
of the peers during the growth to value style rotation late last year. Perhaps investors are
chasing them first given their beaten down valuations.
Chart below shows how German banks stand versus rest of Europe:
Plus, China's fresh stimulus measures and with trade deal around the corner investors are
chasing stocks that they have shunned for long fearing slowing economic growth.
China's central bank said overnight it was lowering how much cash banks were required to
hold, the eighth reduction since 2018, and a move that should free around $115 billion to boost
its economy.
(Thyagaraju Adinarayan)
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BEIJING'S FRESH STIMULUS DRIVES STOCKS HIGHER; TULLOW SLUMPS (0823 GMT)
European stocks open sharply higher and the pan-European STOXX 600 is a couple of
points away from hitting a fresh record high driven by a solid rally in mining stocks after
China's fresh stimulus measures.
Risk-on trades across the board with cyclical sectors such as mining, banks and retail among
top gainers.
In single stocks, Airbus is rising 2% after beating its 2019 aircraft delivery
goals. Capita +1.5% after a report by the FT that the British company is seeking to
invest in tech start-ups in an attempt to shift away from its traditional outsourcing market.
Among fallers, Tullow Oil is taking a massive hit, plunging 18%, after it says the
reservoir in its newly struck oil well in offshore Guyana was below its pre-drill estimates.
(Thyagaraju Adinarayan)
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2020 SET TO KICK OFF IN STYLE (0751 GMT)
Futures point to a solid start for Europe as China's fresh stimulus to support a slowing
economy is helping world stocks kick-off 2020 in style.
China's central bank plans to cut the amount of cash that banks must hold as reserves - a
move that has boosted Chinese stocks to near 2-year highs. In Europe, STOXX futures index is
rising 0.6%, FTSE futures is up 0.4%, while Germany is slightly on the backfoot in catch up
trade (-0.2%) with rest of Europe as Frankfurt was shut on new year's eve.
It's been very quiet this morning on the corporate front with very few major stock moves
expected.
UK's IP Group is seen rising 5%, according to one dealer, after its portfolio
company Oxford Nanopore Technologies completed new round of financing.
Shares of Lloyds Banking Group could come under pressure after its internet banking
services were down on new year's morning.
Airbus, meanwhile, is seen rising 1% after beating its 2019 aircraft delivery
goals.
Some headlines to digest:
EXCLUSIVE-Airbus beats goal with 863 deliveries in 2019, up 8% -sources
EXCLUSIVE-China halts British stock link over political tensions -sources
HSBC kicks off year with Hong Kong branches closed, vandalised
(Thyagaraju Adinarayan)
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HAPPY NEW YEAR! (0612 GMT)
After a couple of subdued sessions, European stocks point to a promising start to the decade
with some decent gains expected across the board taking cues from Asia.
Asian shares kicked off 2020 on a high buoyed by Chinese markets after Beijing eased
monetary policy to support slowing growth.
DAX stock futures, which opens after a two-day break, seems to be under pressure as it
catches up with rest of Europe on new year's eve trade, when bourses closed lower.
Financial spreadbetters IG expect London's FTSE to open 25 points higher at 7,568,
Frankfurt's DAX to open 34 points lower at 13,215 and Paris' CAC to open 35 points higher at
6,013.
(Thyagaraju Adinarayan)
*****
(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)
