* European shares edge up to new record high
* Prosus hit by China gaming regulation fears
* U.S. futures point to mild gains
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ANOTHER HISTORIC PEAK FOR THE STOXX (0730 GMT)
Mild gains at the open meant that the pan-European STOXX 600
equity benchmark managed once again to nudge up to another
record high but overall it looks there is not much conviction.
A drop in tech stocks, which were dragged by heavy losses in
Tencent shareholder Prosus on fears of regulatory risks
in the Chinese gaming industry, meant the STOXX was last up just
0.2%.
Better than expected Q2 numbers pushed Soc Gen
shares up 5.3% as the bank broadly rose, helped by a rebound in
government bond yields after a multi-day losing streak.
Smiths Group agreed to sell its medical division
for $2.3 billion, a value which is below market expectations. No
wonder its shares fell 6.9% to the bottom of the STOXX.
Here's your opening snapshot.
(Danilo Masoni)
*****
THE GREAT WALL OF WORRY (0730 GMT)
After commodities, tech giants and online tutoring, are
video games coming into Chinese regulators' crosshairs?
A Chinese state media outlet branding online games
"spiritual opium" was enough to send shares in Tencent tumbling
10%, the biggest daily fall in a decade. Panic is engulfing
rivals such as NetEase, XD and GMGE
.
Wall Street futures still hint at a stronger open and
European bourses are seesawing around flat but fears are
palapable of another Chinese regulatory assault -- one that
coincides with a resurgence of COVID-19 caseloads worldwide and
signs the growth rebound has peaked.
Central banks, for now at least, show no signs the shifting
narrative is forcing them off the tapering path.
The Reserve Bank of Australia on Tuesday stuck to plans to
reduce bond-buying by A$1 billion a week from next month, even
though swathes of Australia are under lockdown.
While the Federal Reserve and its boss Jay Powell have
struck a dovish note, there is clearly dissent. Governor
Christopher Waller for instance said support for the economy
could be reduced by October if the next two monthly jobs reports
each show employment rising by more than 800,000.
On markets, the Australian dollar jumped half a percent
versus the U.S. dollar after the RBA showed it was not yet for
turning. The U.S. currency remains just off one-month lows.
A report from the Institute for Supply Management on Monday
showing July U.S. manufacturing growth slowed for the second
straight month was enough to drive another lurch lower in global
bond yields, led by a five basis-point fall in 10-year U.S.
borrowing costs to 1.1510%.
The moves also took German 30-year yields back below zero
for the first time in six months.
But if bond markets are painting an increasingly dire
picture of future growth, there is no sign of that on world
stocks which remain a whisker off record highs. And if
second-quarter earnings mark a peak, it's a pretty high one,
with growth running at 90% to 120% year-on-year.
Dealmaking continues too -- Sanofi has agreed to buy U.S.
biotech Translate Bio in a $3.2 billion deal.
Key developments that should provide more direction to
markets on Tuesday:
- Standard Chartered reported a 57% jump in H1 profit and $350
million worth of shareholder payouts
- BP to increase dividend by 4% and up share buybacks after Q2
profit rose to $2.8 billion
- Euro zone PPI
- U.S. factory orders
- Fed speakers: Board governor Michelle Bowman
- U.S. earnings: DuPont, Sunoco, Eli Lilli, Chlorox, Alibaba,
Conoco Group, Marriott, Allegheny, Cummins, Ralph Lauren,
- European earnings: BMW, BP, Generali, Poste Italiane, Societe
Generale, Stanchart, Stellantis,
(Sujata Rao)
*****
DELTA CONCERNS SPOOK INVESTORS, BANK RESULTS IN FOCUS (0540
GMT)
After touching fresh record highs on Monday, European shares
are seen starting the day in negative territory as renewed
concerns for the Delta coronavirus variant spread spook global
investors once again.
In corporate news, bank results could liven up the mood
across Europe.
In China, the spread of the virus from the mainland's coast
to its inland cities put authorities on high alert, adding
concern about increasing Chinese regulation in sectors ranging
from technology, fintech and education.
French bank Societe Generale raised its FY
forecast as the lender swung back to a profit in the second
quarter on lower pandemic-related charges for bad loans and a
rebound in its French retail banking business.
Standard Chartered posted a higher than expected
57% jump in first-half pretax profit and announced a $250
million share buyback, with the bank also resuming dividend
payments by unveiling a 3 cents per share interim payout.
On the deal front, French drugmaker Sanofi said it
made a $3.2 billion offer to buy U.S. biotech company Translate
Bio.
