Next Share News (NXT)

* European stocks decline after solid new year rally
* STOXX 600 down 0.4% after U.S. air strikes in Iraq raise geopolitical tensions
* Airlines take a hit on soaring oil prices
* U.S. stocks slide 1% at open

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

MIDDLE EAST TENSIONS: A CORRECTION COMING? (1454 GMT)
With markets taking a sharp U-turn today, some investors are wondering if the Middle East
crisis is what it takes for markets to finally pull back after a mammoth bull run.
Though today's stock market sell-off does slightly dent hopes for a repeat of 2019
performance, this also reminds us of attacks on Saudi Aramco facilities last September, which
hardly made a long lasting impact.
ING strategists, however, say if events in the Middle East escalate "severely", overweight
positioning in risk assets could easily trigger a 7%-10% correction in equities.
"The focus is now on the potential severity of Iranian retaliation and were that retaliation
to trigger a prolonged spike in crude, sufficient enough to put a big dent in global growth,"
they add.
Latest tweets from Trump:


(Thyagaraju Adinarayan)
*****

BITCOIN (THE SAFE HAVEN?) JUMPS AS STOCKS BLEED (1126 GMT)
Bitcoin, the world's biggest cryptocurrency, is enjoying a nice rally (+5.5%)
while stock markets are selling off amid worries of heightened geopolitical tensions after U.S.
air strikes in Iraq killed a top Iranian commander.
Bitcoin is one of the few asset classes doing well today, apart from crude oil.
The cryptocurrency has sometimes behaved like a safe-haven asset, and the chart below shows
how they surged overnight after U.S. air strikes in Iraq, while S&P 500 futures slipped:


This chart shows how bitcoin outperformed stocks during the U.S.-China trade escalation last
year:


(Thyagaraju Adinarayan)
*****

OPENING SNAPSHOT: AIRLINES, GAMBLING FIRMS SLIDE; OIL COS RISE
European stocks on the backfoot this morning on heightened geopolitical tensions after U.S.
air strikes in Iraq killed a top Iranian commander. The news sent oil prices soaring, in turn
hurting share prices of European airlines.
"The mood has darkened considerably as the US Mideast strike undercuts the overall
constructive sentiment supposition... I expect tensions to intensify before abating, and we
should anticipate defensive strategies to flourish," Stephen Innes, chief Asia market strategist
at AxiTrader, writes in a note to clients.
The pan-European STOXX 600 index is sliding 0.6% weighed down by the travel &
leisure sector. Lufthansa and Air France shares were among the top
fallers in Europe as rising oil prices could eat into their margins.
Among other movers, UK gambling firms are taking a hit after a media report said that they
could face a potential ban on running "VIP schemes". Playtech, GVC and William
Hill were down 1%-2%.
Tullow Oil topped STOXX index rising 5% thanks to Brent crude's overnight spike. The
STOXX oil & gas index was the only sector trading in positive territory.
Other significant moves:
** Swedish Match +3% after FDA said near-term action against flavoured cigars that
had been included in the March 2019 draft guidance has been removed.
** Cellnex +3.3% after agreeing to buy Portuguese telco tower operator OMTEL for
around 800 million euros from Altice and Morgan Stanley Infrastructure Partners.

Here's the opening snapshot (sea of red):



(Thyagaraju Adinarayan)
*****


ON OUR RADAR: NEXT, XXL, TOBACCO FIRMS, OIL (0754 GMT)
Stock futures point to a weak open in Europe with bourses seen falling 0.5% to 0.8% as U.S.
air strikes in Iraq, which killed a top Iranian commander, heightened geopolitical tensions.
"The New Year surge in risk assets is likely to stall this morning, as investors rotate into
more defensive areas following the U.S. air strike on Iran's military leadership overnight,"
says Ian Williams, economics & strategy research analyst at Peel Hunt.
Middle East tensions sent oil prices spiking with crude futures jumping more than 4%. The
move is likely to spark a rally in European oil & gas companies.
On the corporate front, Next is seen rising 2%-5% after the British retailer
reported Q4 sales ahead of forecasts and edged up its FY profit outlook.
In stark contrast to Next's numbers, Nordic region's largest sports retailer, XXL,
said it saw a sharp decline in Q4 sales due to warmer winter and heavy discounting by
competitors. One trader expects shares to open down 10%-15%.
Tobacco companies BAT and Imperial Brands in focus after FDA's final
guidance on flavoured e-cigarettes. Jefferies believes the financial impact on big tobacco
companies is likely to be minimal.
Spain's Cellnex is called 1% higher by traders after the telco tower operator
agreed to buy OMTEL for around 800 million euros from Altice and Morgan Stanley
Infrastructure Partners.

Key headlines:
Britain's Next edges up profit forecast after strong Christmas
Ryanair's O'Leary prepared for more 737 Max delays - Wiwo
Sunrise's CEO Swantee, Chairman Kurer quit after failed Liberty Global deal
Credit Suisse announces $1 billion 2020 share buyback programme
UK house price growth tops 1% for first time in a year -Nationwide

(Thyagaraju Adinarayan)
*****

EUROPE ON THE BACKFOOT (0632 GMT)
After their best opening session since 2013, European stocks are expected to be on the
backfoot on Friday as U.S. air strikes in Iraq, which killed a top Iranian commander, heightened
geopolitical tensions pushing oil prices higher and global equities lower.
Financial spreadbetters IG expect London's FTSE to open 32 points lower at 7,572,
Frankfurt's DAX to open 70 points lower at 13,316 and Paris' CAC to open 28 points lower at
6,013.
U.S. stock futures meanwhile were trading 0.8% lower.

(Thyagaraju Adinarayan)
*****


(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)