STOXX Europe 600 down 0.9%
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Bid talk boosts Ocado, banks drop
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BoE eyed after Norway, Swiss hikes
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U.S. stock futures decline
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LIFE'S A BEACH FOR EUROPEAN TOURISM STOCKS (0906 GMT)
Travel and leisure stocks are the best performing among sectors in Europe so far in 2023, even outdoing an AI-fuelled rally in tech which comes in second place.
While the pan-European STOXX 600 is up 6.6% this year so far, travel stocks have risen 24%. Tech names are up 21%.
According to Ben Laidler, global markets strategist at eToro, the strong performance of the platform's so-called basket of 'BEACH' stocks can be attributed to resilient consumer demand and travel company price rises.
"Travelers are willing to prioritize their holiday spending despite the cost-of-living squeeze," he writes in a note.
eToro's coastal-inspired acronym covers booking sites, entertainment, airlines, cruise lines and hotels stocks.
Among the European names eToro lists is French-based hospitality group Accor, Norwegian Cruise Line and the UK's InterContinental Hotels Group.
The sector is on a mission to recover big pandemic losses, says Laidler, but even though global travel and tourism is pitted to surge 23% this year, it will still lag about 5% below pre-pandemic levels.
STOXX NEAR 3-MONTH LOWS (0806 GMT)
Broad selling pressure swept across European equity markets on Thursday, sending the STOXX Europe 600 to its lowest level since late March and briefly propping up the region's volatility gauge to above 16 from very depressed levels.
The region wide-benchmark was last down 1%. No sector was trading in the black. Banks led fallers and nine out of ten STOXX companies were posting declines. Among the rare gainers was Ocado, up 16% due to bid interest talk.
In central bank news ahead of the BoE later in the day, Norway's 50 basis points rate hike surprised to the upside, while the Swiss National Bank raised by just 25 points, defying expectations for a larger increase.
Here's your opening snapshot:
(Danilo Masoni)
EUROPE HEADS SOUTH (0637 GMT)
European shares were set to open lower on Thursday on uncertainty over the size of the BoE's interest rate hike later on and following tech-driven losses on Wall Street.
EuroSTOXX50 and FTSE futures fell 0.8% and 0.9% respectively, while in Asia, shares edged lower, reacting to remarks from Federal Reserve Chair Jerome Powell sticking to his recent hawkish tone. S&P 500 futures declined 0.2%.
Corporate newsflow in Europe was thin, although a few M&A headlines grabbed the attention.
Bloomberg reported that Telecom Italia was restarting efforts to sell a minority stake in its enterprise unit, potentially valued at more than 6 billion euros.
It also reported that Midea has dropped its pursuit of Swedish home appliance maker Electrolux.
Intelsat and SES ceased merger talks, ending what would have signalled further consolidation in the rapidly changing satellite internet industry.
Elsewhere, approval of a $1 billion share buyback program could offer support to Logitech.
Eyes also on Aegon after the insurer projected growth in its free cash flow in 2025, as it steps up a strategy of simplifying its corporate structure.
Cardboard maker DS Smith reported a 75% rise in profit before tax.
(Danilo Masoni)
HOW HIGH WILL BOE GO? (0558 GMT)
The stage is set for the Bank of England on a central bank- heavy day in Europe, with a hike all but certain and the only doubt being whether the BoE will raise interest rates by 25 basis points or by 50 basis points and turn fully hawkish.
After a hotter than anticipated inflation report on Wednesday, markets priced in a nearly 50% chance that the BoE would opt for a half a percentage point hike. Economists, polled by Reuters last week, unanimously expected the BoE to raise interest rates by 25 bps to 4.75%, their highest since 2008.
The policy divergence between BoE and other major central banks as a result of red hot UK inflation versus easing but not fast enough inflation in other parts of the world has provided sterling a lift. The pound was muted in Asian hours but not far from the 14-month peak it touched last week.
With China and Hong Kong closed for a holiday, trading in Asia was a bit subdued, with the MSCI Asia ex-Japan index struggling for direction, while the yen firmed up against the dollar and hovered around the 141 per dollar level.
Futures indicated European stocks were set for a lower open as traders weigh comments from Federal Reserve Chair Jerome Powell that were consistent with his recent hawkish tone.
Powell flagged that a majority of policymakers see two more quarter-point rate increases as likely by the end of the year and he still won't characterise the Fed's decision last week to hold interest rates steady as a "pause".
"We didn't use the word pause and I wouldn't use it here," Powell said.
While his comments failed to surprise, markets are still unconvinced that the Fed will provide two more hikes. Markets are pricing in a 72% chance of a 25 bps hike next month and then no more, according to CME FedWatch tool.
Elsewhere, Turkey's central bank, under new chief Hafize Gaye Erkan, is expected to raise its policy rate sharply and confirm a policy pivot as the country takes steps toward economic orthodoxy to address soaring inflation.
Swiss National Bank and Norway's Norges Bank are also due to announce their policy decisions, with a 25 basis point hike widely expected from both central banks.
Key developments that could influence markets on Thursday:
Economic events: Policy rate decision from BoE, Turkey's central bank, Swiss National Bank and Norway's Norges Bank
(Ankur Banerjee)