Europe midday: Nomura goes neutral on equities, although still bullish



LONDON (ShareCast) - - Nomura goes tactical neutral on equities
- Eurozone money supply data distorted by Spanish figures
- Italian long-term bonds slightly lower after debt auctions
- Deposits at Greek Banks rose by 4 per cent in December

FTSE-100: 0.01%
Dax (Xetra: ^GDAXI - news) -30: -0.11%
Cac-40: 0.02%
FTSE Mibtel 30: 0.45%
Ibex 35: -0.13%
Stoxx 600: -0.07%

The main European equity indices were still trading slightly lower at the midday point of the session despite the latest gains seen in equities on Wall Street and in Asia. That ahead of this afternoon´s economic data releases Stateside.

Of interest, inflows into equity funds - mostly into emerging markets, admittedly - sustained a seventh consecutive rise ahead of bond oriented ones last week although the rate of flows moderated, according to the latest data from EPFR.

The currently high levels of 'bullishness' reached by equity investors has prompted Nomura´s Global Quantitative Strategy Team to issue a short-term tactical neutral position on the market, although they remain fundamentally bullish on equities.

Just released Eurozone money supply data revealed an unexpected contraction, but they appear to have been distorted by the financial system restructuring in Spain.

Out in the corporate patch, Monte dei Paschi (Milan: BMPS.MI - news) di Siena, announced yesterday that it is looking for a 'white knight' investor to help revive its ailing fortunes.

Discount airline Ryanair sees net income coming in at about €540m euros for the year ending March 31st, outlook which may disappoint some investors.

Italian bonds are trading slightly lower following this morning´s debt auctions.

Back on the equity front, and from a sector stand-point, the worst performing industrial groups are: Travel (-0.68%), Utilities (-0.61%) and Basic resources (Xetra: A0JC0X - news) (-0.56%). Banks and Insurers are leading gains.

Eurozone money supply below forecasts

The growth rate of Eurozone money supply, as measured by its three month moving average, accelerated to 3.7% from 3.4% a year ago (Consensus: 3.8%). However, the monthly data for December actually slowed notably, falling to a 3.3% year-on-year pace after 3.8% in the previous month.

However, the ECB notes that the December 2012 figures were partly affected by the Spanish banking sector restructuring that that had a sizeable downward impact even on loan flows corrected for sales and securitisation, Barclays Research points out.

ISAE´s Italian business confidence index for the month of January slipped to 84.6 from 85.7 a month before (Consensus: 86.1).

Other asset classes lower
The euro/dollar is now falling by 0.12% to the 1.3440 dollar mark.

Front month Brent crude futures are now lower by 0.053% to the 113.22 dollar mark on the ICE.


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