Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts with Joice Alves (joice.alves@thomsonreuters.com)
and Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Danilo Masoni and Stefano
Rebaudo (stefano.rebaudo@thomsonreuters.com) in Milan.
OPENING SNAPSHOT: BANKS, TRAVEL AND LEISURE SHARES FALL (0737 GMT)
As expected, the new money laundering scandal is hitting European banking shares hard with
the index losing 2.8%, back to May lows and down more than 40% year-to-date.
As you can see below, shares all across the continent are feeling the heat, it's not just
about the few names that have been mainly mentioned so far:
But another big move is also at play this morning. Travel and leisure shares are getting
hammered as Europe struggles to contain coronavirus infections and as speculation about new
lockdowns, particularly in the UK, does the rounds.
Here are the main movers in the sector and as you can see a lot of the losers are listed in
London where a statement on the COVID-19 situation is expected later this morning:
While travel and banks are definitely on the radar, losses are spread throughout sectors
with not a single industry in positive territory. It is very clearly a risk-off day with
utilities, healthcare and food scoring the best (so to speak) performance.
Overall the STOXX 600 is down 1.4%.
There's also quite a lot of price action for individual stocks, notably in Germany with
shares in United Internet down 23% after a guidance cut.
Another big loser is Rolls Royce which warned it needs to raise capital to beef up its
balance sheet.
Network International is also getting another beating today, down 17% after a tough few days
last week.
Many are still scratching their heads over the recent losses.
"The recent share price performance has left many investors wondering what they have
missed", Liberum analysts said in a note.
(Julien Ponthus)
*****
ON THE RADAR: BANKS, AGAIN... (0642 GMT)
Being the sector which has bore the brunt of the coronavirus crisis on the trading floors,
banks definitely don't need the attention of a new scandal, but there you go.
With BuzzFeed and other media reporting several global banks moved large sums of allegedly
illicit funds despite red flags about their origins, banking shares are set to open in negative
territory.
HSBC and Standard Chartered's shares in Hong Kong shares already fell on Monday and there's
possibly more losses to come during the European session.
On a more positive note, after a wave a domestic mergers, there's some speculation of
pan-European mergers brainstorming going on. On a more limited scale, Societe Generale is
gearing up to launch the sale of its asset management arm Lyxor.
Talking about deals, French telecoms group Iliad is launching a bid for Polish mobile phone
operator Play, valuing the company's total capital at 2.2 billion euros and corresponding to an
enterprise value of 3.5 billion euros.
There's already quite a bit of market price action in Germany in the sector with shares in
United Internet down 14.4% in early Frankfurt trade, while its subsidiary 1&1 Drillisch losing
18.3% after a guidance cut.
Shares of Britain's Rolls-Royce Holdings are also in the spotlight after the group said it
was looking to raise up to 2.5 billion pounds in an effort to strengthen its balance sheet.
Still in London, Royal Dutch Shell is looking to slash up to 40% off the cost of producing
oil and gas in a major drive to save cash so it can overhaul its business and focus more on
renewable energy and power markets, sources told Reuters.
More generally, the FTSE 100 and 250 will be under pressure as Boris Johnson ponders
additional COVID-19 restrictions with the trend of infections seemingly going in the wrong
direction.
On the bright side, there's quite a lot of chatter about more support for the UK economy.
Another morale booster for London is Streaming firm Wheaton Precious Metals announcing it is
planning a UK listing by year-end, potentially the largest metals and mining company to join the
London Stock Exchange since Glencore in 2011.
(Julien Ponthus)
*****
MORNING CALL: GLOOMY BUILD-UP (0532 GMT)
This week just doesn't look set for a happy beginning with quite a gloomy build-up so far.
European futures are down about 0.6% while the FTSE appears ready to make losses more in the
region of 0.9%. Wall Street futures are also down about 0.4% and the session in Asia is ending
on a negative note as MSCI's broadest index of Asia-Pacific shares outside Japan
retreats 0.4%.
Fears about the resurgence of the pandemic in Europe are expected to keep traders on their
toes.
As noted by Michael Hewson at CMC Markets, sentiment at the start of last week was boosted
by a wave of M&A wave but there's nothing expected of the sort this morning so far.
"As we look to a new week, with investors absorbing the recent statements from central
banks, and the prospect that further stimulus may not come immediately, concerns are rising that
the summer recovery is probably as good as it gets when it comes to the recent rebound in
economic activity", he writes.
"This reality combined with the growing realisation that a vaccine remains many months away,
despite President Trumps claims to the contrary, has made investors increasingly nervous, as we
head into an autumn that could see lockdowns reimposed", Hewson told his clients.
(Julien Ponthus)
****