Stock Market News (European Open) – Spanish stocks underperform on Catalan uncertainty; Stoxx 600 remains near 2-year highs
November 6, 2017 11:28 am
Equities in Asia were giving a mixed picture today with most major indices finishing the day not much changed. In Japan, the Nikkei 225 closed marginally higher and the Topix lost 0.1%. Hong Kong’s Hang Seng was little changed and the Shanghai Composite added 0.5%. Australia’s S&P/ASX 200 slid 0.1%.
Dollar/yen today touched a near eight-month high of 114.72 on the back of monetary policy divergence as the Federal Reserve remains on a path of normalization whereas the Bank of Japan is not ready to move away from its ultra-easy monetary policies. Despite not managing to finish the day higher – at least not in a significant manner – the falling yen still supported Japan’s exporter-heavy benchmarks.
People’s Bank of China Governor Zhou Xiaochuan made reference to “hidden, complex, sudden, contagious and hazardous” risks in the financial system in an article published in the PBOC website over the weekend, making reference to expanding credit. Despite an earlier fall on the back of these comments, Chinese stocks managed to recover on the losses.
US President Donald Trump is currently on a trip to Asia. Today he made remarks of unfair trade with Japan whilst in Tokyo, saying he would push for more reciprocal trade though in a “friendly” way. He will also visit South Korea and China with trade remaining on the agenda, while North Korea is also widely expected to be at the center of discussions.
In Europe, at 1029 GMT the pan-European Stoxx 600 was down by 0.1% but not far below the more than two-year high of 398.05 hit the previous week. The blue-chip Euro Stoxx 50 was trading lower by 0.35%.
All major blue-chip country indices were in the red with losses though being contained for the most part. The UK’s FTSE 100, German DAX and French CAC 40 traded lower by 0.1%, 0.2% and 0.2% respectively. The Spanish IBEX 35 was 0.5% lower, performing the worst among its peers.
Former Catalan leader Carles Puigdemont and four of his associates turned themselves to the Belgian authorities on Sunday after Madrid’s issuance of an arrest warrant charging them for rebellion and sedition. Weekend polls show pro-independence parties in the lead in Catalonia and this is likely what has been weighing on Spanish equities during today’s trading.
UK-based ConvaTec Group (up 6.65%) led gains within the Stoxx 600 (and the FTSE 100) after UBS upgraded its stock to “buy” from “neutral”.
On the downside, Dutch-based energy company SBM Offshore (down 10.3%) was the Stoxx 600’s worst underperformer after taking a $238 million provision in relation to a US probe over a Latin American bribery case. In addition, as a result of the preliminary settlement’s fallout (with Brazil’s authorities), the firm would be unable to participate in tender offers for Petrobras, one of its biggest customers. SBM Offshore was also the lead decliner in Netherlands’ AEX index (down 0.2%).
Kepler Cheuvreux cut Société Générale’s (down 3.7%) and BNP Paribas’ (down 1.8%) price targets. SocGen, which led losses on the CAC 40, also saw its price target being reduced by Natixis, JPMorgan and Deutsche Bank.
French hotel group Accor (down 1.4%) was the third worst performer within the CAC after the two aforementioned banks. Prince Alwaleed bin Talal, its third biggest shareholder, was arrested in Saudi Arabia on the back of an anti-corruption purge by the future king. There is speculation that those efforts might lead to a rebalancing of Saudi investments around the world.
Dow futures last traded marginally higher, S&P 500 equivalents were lower by 0.1% and Nasdaq 100 contracts were little changed.
Equities in Asia were giving a mixed picture today with most major indices finishing the day not much changed. In Japan, the Nikkei 225 closed marginally higher and the Topix lost 0.1%. Hong Kong’s Hang Seng was little changed and the Shanghai Composite added 0.5%. Australia’s S&P/ASX 200 slid 0.1%.
Dollar/yen today touched a near eight-month high of 114.72 on the back of monetary policy divergence as the Federal Reserve remains on a path of normalization whereas the Bank of Japan is not ready to move away from its ultra-easy monetary policies. Despite not managing to finish the day higher – at least not in a significant manner – the falling yen still supported Japan’s exporter-heavy benchmarks.
People’s Bank of China Governor Zhou Xiaochuan made reference to “hidden, complex, sudden, contagious and hazardous” risks in the financial system in an article published in the PBOC website over the weekend, making reference to expanding credit. Despite an earlier fall on the back of these comments, Chinese stocks managed to recover on the losses.
US President Donald Trump is currently on a trip to Asia. Today he made remarks of unfair trade with Japan whilst in Tokyo, saying he would push for more reciprocal trade though in a “friendly” way. He will also visit South Korea and China with trade remaining on the agenda, while North Korea is also widely expected to be at the center of discussions.
In Europe, at 1029 GMT the pan-European Stoxx 600 was down by 0.1% but not far below the more than two-year high of 398.05 hit the previous week. The blue-chip Euro Stoxx 50 was trading lower by 0.35%.
All major blue-chip country indices were in the red with losses though being contained for the most part. The UK’s FTSE 100, German DAX and French CAC 40 traded lower by 0.1%, 0.2% and 0.2% respectively. The Spanish IBEX 35 was 0.5% lower, performing the worst among its peers.
Former Catalan leader Carles Puigdemont and four of his associates turned themselves to the Belgian authorities on Sunday after Madrid’s issuance of an arrest warrant charging them for rebellion and sedition. Weekend polls show pro-independence parties in the lead in Catalonia and this is likely what has been weighing on Spanish equities during today’s trading.
UK-based ConvaTec Group (up 6.65%) led gains within the Stoxx 600 (and the FTSE 100) after UBS upgraded its stock to “buy” from “neutral”.
On the downside, Dutch-based energy company SBM Offshore (down 10.3%) was the Stoxx 600’s worst underperformer after taking a $238 million provision in relation to a US probe over a Latin American bribery case. In addition, as a result of the preliminary settlement’s fallout (with Brazil’s authorities), the firm would be unable to participate in tender offers for Petrobras, one of its biggest customers. SBM Offshore was also the lead decliner in Netherlands’ AEX index (down 0.2%).
Kepler Cheuvreux cut Société Générale’s (down 3.7%) and BNP Paribas’ (down 1.8%) price targets. SocGen, which led losses on the CAC 40, also saw its price target being reduced by Natixis, JPMorgan and Deutsche Bank.
French hotel group Accor (down 1.4%) was the third worst performer within the CAC after the two aforementioned banks. Prince Alwaleed bin Talal, its third biggest shareholder, was arrested in Saudi Arabia on the back of an anti-corruption purge by the future king. There is speculation that those efforts might lead to a rebalancing of Saudi investments around the world.
Dow futures last traded marginally higher, S&P 500 equivalents were lower by 0.1% and Nasdaq 100 contracts were little changed.
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