Last checked at 
* European shares 0.4% lower, Milan outperforms
* Travel stocks top sectoral decliners
* STMicro and Novozymes at multi-yr highs after estimate-beating results
* ECB keeps policy unchanged, eyes on strategic review
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
WISE OWL IN A DOVE'S SKIN? (1458 GMT)
Euro zone banks are sharply down after a initial brief spike during Christine Lagarde's
conference as she further reiterated that 'lower for longer' interest rates are here to stay.
The euro fell to a six-week low and German bond yields dropped to their lowest in two weeks.
"One reason might have been that she declined on a few occasions to distance herself from
negative interest rates," ING Senior Rates Strategist Antoine Bouvet says.
Her comments today has been perceived as dovish though she rejected in December to be
labelled the traditional central banking way. Lagarde said she was neither a policy hawk nor a
dove, but rather an owl, who will use her wisdom.
She even wore an owl pin today (check the image below).
(Thyagaraju Adinarayan and Dhara Ranasinghe)
*****
CHANGES IN ECB STATEMENT: "STRATEGIC REVIEW" THE ONLY CHANGE (1307 GMT)
No major reaction in FX, bonds or stocks after the ECB kept its monetary policy unchanged.
But as expected the central bank launched a "strategic review" of its inflation goal and tools
today with no further details disclosed in the release.
All eyes now turn to Lagarde's press conference (in 25 minutes) for details on the
"strategic review".
Here's the ECB statement with changes underlined:
(Thyagaraju Adinarayan and Ritvik Carvalho)
*****
WILL CORONAVIRUS INFECT AIRLINES? LESSONS FROM THE PAST (1155 GMT)
One way to assess possible risks of the new Coronavirus outbreak for the European airlines
industry is to look at the damage from past global virus crisis (H1N1, SARS and Ebola).
Credit Suisse has done so and although the severity of the latest outbreak is uncertain for
now, global virus overall had "little historical impact" on the industry.
However, if we look in detail what happened during 2003 SARS crisis, with a final death toll
of 774 people, SARS was to blame as a major contributor to the weak revenues over the period, CS
says.
Air passenger volumes were considerably impacted by SARS, most notably in Q2 in 2003, with
traffic to China falling by 49% YoY albeit off a base seven times smaller than today’s passenger
volumes, CS says.
Over the same period, Lufthansa reported that Q2 APAC traffic dropped by 16% (yields down
7%), which was wholly attributed to the SARS crisis. All of the major European and US carriers
cited a normalization of trends by H2 of 2003., CS adds.
(Danilo Masoni)
*****
THE CURIOUS CASE OF SPANISH BANKS (1137 GMT)
If you take a look at the Spanish index, you might be surprised that banks are doing
well today after Bankinter, Spain's fourth biggest bank by market value, said its
profit went down 13% in Q4.
There is a trick: even though profit was down in the final quarter of the year it still beat
expectations and the bank's net profit for the entire 2019 increased 5% to a record of 551
million euros.
Bankinter is up 3.1% and it helped competitors Caixabank, Banco Santander
, Banco de Sabadell and BBVA, which are all up around 1.7 and 0.7%.
The real question is: Is Bankinter's annual result or the latest quarter the strongest
indicator of how Spanish banks will be performing going forward?
UBS seems to believe earnings of Spanish banks will not jump high.
"When put all together, we still forecast a decline in earnings and profitability terms for
all banks in 20E," UBS bank's analysts write.
But UBS has mixed feelings on how shares will cope: it has a buy rating on Santander,
Unicaja and BBVA, neutral on Caixabank and Banco de Sabadell and a sell rating on
Bankia and Bankinter.
(Joice Alves)
*****
ITALY OUT OF SYNC (0904 GMT)
We mentioned yesterday that investors are not overly worried about political turbulence in
Rome and some of them said declines in Italian assets should be faded.
The resignation of Di Maio as 5-Star leader dealt a blow to Italy's governing coalition,
just a few days before regional elections, but that's not expected to bring down the government.
Little surprise then that after yesterday's underperformance, Milan is the only bourse in
positive territory today, as banks gain, helped by yields on the country's sovereign
bonds falling to a five-week low.
"It's unlikely that the new (5-Star) leader would want to throw the party into an early
vote. The greatest risk is that... a rise of defections in parliament towards the League takes
away the majority," says Giuseppe Sersale, fund manager at Anthilia in Milan.
Italy's FTSE MIB index is last up 0.3% while the broader STOXX 600 is down
0.4%.
Here's your morning headline from Italy:
(Danilo Masoni)
*****
OPENING SNAPSHOT: TRAVEL STOCKS BRUISED, STMICRO AND NOVOZYMES FLY (0828 GMT)
European stocks on the backfoot as expected and all broad-based moves point to risk-off mood
among investors as China virus scare hits travel stocks and a potential auto tariff dents cars.
In single stocks, Hochtief and its majority owner ACS drop sharply after
Aussie unit CIMIC Group expects to take a one-off charge of $1.23 billion from its
Middle East exit.
In earnings, Novozymes, ASOS and STMicro stocks are flying
after their estimate-beating results.
Airlines and hotels are under pressure with IHG and Air France at the
bottom of the STOXX travel & leisure index.
Banks and insurance stocks are top sectoral performers (although just barely in black) ahead
of the ECB interest rate meeting later today.
(Thyagaraju Adinarayan)
*****
ON OUR RADAR: TRAVEL STOCKS, ASOS, STMICRO (0753 GMT)
Rapid spread of a new flu-like virus in China is sending a chill down Europe with stock
futures pointing to a 0.4% decline, a day after Germany's DAX and the pan-European
STOXX 600 briefly touched record highs.
Investors are also cautious ahead of ECB's rate decision later today.
Among sectors, auto stocks are likely to continue to crumble under pressure as
Trump's latest tariff threat adds onto to worries of falling sales and shrinking margins.
Airlines, hotels and luxury sectors are on our radar as tourism will take a hit due to virus
scare in China, just as millions were preparing to travel for the Lunar New Year.
UK's IHG says will allow customers to change or cancel stays scheduled up to Feb. 3
across mainland China, Hong Kong, Macau and Taiwan at no additional cost.
It's earnings Thursday here and some decent beats could come to rescue the downbeat
sentiment in markets. European chip stocks are in focus after STMicro's fourth
quarter earnings beat. Traders see STMicro shares to open flat to 3% higher.
ASOS sales raced past estimates (+20% vs. consensus of +15%) in latest evidence
that online retailers have had a great Christmas at the cost of high street players. ASOS is
seen rising 5% to 7% -- a positive read across for Boohoo and Zalando.
Other significant moves: Germany's Hochtief seen 5% down on 800 million euro
on-time charge; Lufthansa seen +2% after report on potential listing of stake in its
jet-maintenance unit; Mothercare seen down 5%, trader says positive tones around the
rescue and refinancing, but the administration of Mothercare UK has cost a further 10 million
pounds
Headlines to digest:
Getlink's revenues hit by Brexit and strikes in France
STMicro posts Q4 net revenues beat but sees sales slowing q/q
Lufthansa weighs listing of stake in jet-maintenance unit- Bloomberg
Britain's ASOS beats sales forecasts in Christmas period
IHG to waive fees for China hotel stay cancellations amid viral outbreak
Anglo American's fourth-quarter output rises on Brazil mine strength
Mothercare Says Recapitalisation On Track, CEO To Leave
UK's Blue Prism says momentum building after revenue rises 83%
(Thyagaraju Adinarayan)
*****
STOCKS ON BACKFOOT ON CHINA VIRUS SCARE (0650 GMT)
European stocks are seen edging lower ahead of the ECB's rate decision and as investors
continue to worry about the spread of spread of a new flu-like virus in China. The caution in
Europe follows a steep 3% sell-off in Chinese stocks.
Auto stocks could come under further pressure as U.S. President Trump threatened to impose
high tariffs on imports of cars from the European Union if the bloc doesn't agree to a trade
deal.
Financial spreadbetters IG expect London's FTSE to open 9 points lower at 7,563, Frankfurt's
DAX to open 46 points lower at 13,470 and Paris' CAC to open 21 points lower at 5,990.
It's also a busy day for earnings with a slew of earnings reports pouring in. STMicro
, which provides chips and sensors to Apple and Tesla, reported Q4 sales slightly above
its outlook but warned of a slowdown next quarter.
(Thyagaraju Adinarayan)
*****
(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)
18 May 2023 11:55
IN BRIEF: De La Rue names Mothercare chair Clive Whiley as chair
De La Rue PLC - Basingstoke, England-based security printed products maker - Says that Clive Whiley, current chair of Mothercare PLC, is appointed as chair, effective immediately. Mothercare is a clothing retailer for expectant mothers and children up to 8 years old. Whiley was previously chair of funeral plan and end of life service provider Dignity PLC. De La Rue says Nick Bray, who was interim chair after Kevin Loosemore's resignation on May 1, will return to his previous role as non-executive director.
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