* European shares rise to session high
* ECB drops bond buy pledge
* Focus on earnings, dealmaking
LONDON, March 8 (Reuters) - Welcome to the home for real time coverage of European equity
markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her
on Messenger to share your thoughts on market moves: email@example.com
CLOSING SNAPSHOT: EUROPEAN SHARES CLOSE ON A HIGH (1638 GMT)
European shares closed quite near to their session highs and clearly got a boost from the
ECB dropping its promise to increase bond purchases if needed.
Here's what the market looked like at the close:
DARK POOL CAPS TO BOOST BLOCK TRADING (1614 GMT)
European markets regulator ESMA yesterday rolled out dark pool trading caps, and they cover
the bulk of Europe's blue-chip stocks. Fidessa's senior regulatory adviser Christian Voigt says
he had previously thought the double volume caps would impact only just a few stocks - but
yesterday's announcement from ESMA showed the impact would be much wider.
The data published by the European markets regulator shows the cap will cover over 80
percent of the most heavily traded shares.
"Yesterday's announcement will probably give another boost to the growth in periodic
auctions, block trading and Systematic Internalisers, as they all provide MiFID II compliant
alternatives," argues Voigt.
Indeed, in the volatility-driven flurry of trading activity witnessed so far this year, dark
pools have lost market share to exchanges and other venues which offer alternatives including
trading in large blocks.
If this pattern continues, Voigt reckons the dark pool caps may show themselves to be, in
effect, a ban on dark pool trading in disguise.
"Does this herald a permanent change in market behaviour and a move away from anything
related to double volume caps? In which case you might wonder what the difference is between the
double volume cap and a simple ban," says Voigt.
We'll be in the dark ourselves as to what impact the caps will have, until they're
implemented on Monday - and will likely have to wait longer to see how the change impacts wider
RISING RATES: TECH WON THIS BATTLE, BUT CAN IT WIN THE WAR? (1535 GMT)
Tech stocks have done well during trade war fears and have also clearly
outperformed the market since fears of rising inflation and interest rates triggered the
While their somewhat obese multiples made them an obvious target for "equity risk premium"
readjustment in the light of "risk-free" bond yields rising, they have done remarkably well over
the last three months. As you can see below, there's currently a handsome gap between the MSCI
World and the specific Information and Technology index :
a research note:
Deluard also has another point to make: the valuation of tech companies is based on the
promise of very speedy growth but if their current economic paradigm fades, there will be a case
for their multiples to gradually align themselves with the ones applied to the rest of the
According to Deluard, Apple (NasdaqGS: AAPL - news) , Facebook (NasdaqGS: FB - news) , Microsoft (Euronext: MSF.NX - news) , Google, Amazon, Netflix (Xetra: 552484 - news) , Tesla, Oracle (NYSE: ORCL - news) ,
capitalisation to meet the S&P's average of 1.4 times sales.
The analyst also points out to a chart by Gavekal Research which points out that cycle has
its time, from the hype around Japanese banks in the 90s, to the dot-com bubble of 2000.
Sic transit gloria mundi: http://bit.ly/28M5Lh5
EUROPEAN STOCKS HIT FRESH SESSION HIGH AS DRAGHI SPEAKS (1418 GMT)
Financials continue to drive European stocks higher, with both the STOXX 600 and Euro zone
stocks up at session highs.
It's likely that euro zone stocks are being supported by a fall in the euro as ECB President
"While we had expected that the hawks would push for the QE easing bias to be dropped (as
they had done in the last meeting on 25 January), we did not expect this proposal to find a
majority today. This gives today's ECB meeting a hawkish tilt," Reinhard Cluse, European chief
economist at UBS, said in a note.
Here's your European market snapshot:
EURO ZONE BANKS SHINE AS ECB DROPS BOND BUYS PLEDGE (1323 GMT)
Expectations were growing for the ECB to drop its promise to increase bond purchases if
needed and it did just that. Read this:
Euro zone banks jumped at the prospect of monetary normalisation getting underway
and rose as much as 0.7 percent after the announcement to reach a session high.
It doesn't look like traders were taken by surprise and the broader market reaction is
fairly limited. The STOXX trimmed some if its gains but stayed comfortably in positive
Here's our main story: ECB drops easing bias, taking baby step towards stimulus exit
GENDER-DIVERSITY INVESTING - PROGRESS, OPPORTUNITY, AND FURTHER TO GO
Today is International Women's Day, and what an appropriate occasion to take a look at how
changes in society with respect to the evolving role of women has impacted the investment world.
BAML strategists cite a 2013-14 study by Andrea Turner Moffitt, Sylvia Ann Hewett and the
globally make decisions over the financial assets in their households, but 44 percent of U.S.
women did not have a financial advisor - so this is a large but potentially untapped area source
But the implications go beyond women as investors. BAML found that gender-diverse companies
have seen lower price and EPS risk and higher ROE.
diversity or equality have grown at an 81 percent annualised rate over the past three years to
over $600 million.
This is a similar finding to research carried out by UBS Wealth Management, whose analysts
found that companies in which woman occupy at least 20 percent of leadership positions were more
profitable across various metrics than less gender-diverse peers.
"We view gender diversity as a proxy for a well-run company," Alexander Stiehler, analyst at
UBS WM, said in a note.
But there is still a way to go - BAML found that women make up only 22 percent of S&P 500
boards (though this has been improving over the past decade).
Below is how UBS' gender-focused portfolio has performed compared with the broader equity
MARKETS CAN REBOUND IN THIS "TRANSITION PHASE", HSBC RECKONS (1118 GMT)
Yes "Goldilocks" is over but that doesn't mean that it's all gloom and doom ahead, HSBC
reckons in a multi asset strategy note this morning.
"We have entered a transition phase for markets but not yet a new regime", its analysts say,
looking at what lies ahead after the February correction.
"We expect a rebound in global equities post the correction phase", the bank says, noting
however that an increase in volatility and correlations means "there will be less opportunity
for diversification and also lower risk-adjusted returns going forward."
HSBC analysts believe global synchronised growth still has enough fuel in its engine to
support equity markets for the time being even if they have a long list of things that could go
To name a few, a spike in inflation triggering a sudden tightening of monetary policy,
Brexit negotiations derailing, trade wars or tensions with Russia escalating.
Here are HSBC's calls on fixed income and equities:
LATE ON YOUR ECB HOMEWORK? HERE'S ING'S 'ANGRY BIRDS' CHEAT SHEET (1005 GMT)
While there's absolutely no expectations for an ECB decision on interest rates today, focus
is zoomed on Quantitative Easing and every word said on that matter will be thoroughly
"The language that is speculated to be targeted on Thursday is the reference to the central
bank's readiness to increase the asset purchase program in size or duration if the outlook
becomes less favourable", said Craig Erlam, senior market analyst at Oanda.
"While this was always a pointless line, the ECB has stuck by it and the removal of it is a
small acknowledgement that less dovish language in warranted", he added.
who points out that "the data isn't moving its way. Inflation is falling back, with headline CPI
at a one year low, the euro is rising and some of the recent data has been slightly softer of
late, and that’s before we even start to look at the current backdrop of Italian politics."
To help you read through the ECB's statement (1245 GMT) and presser (1330 GMT), which
sometimes feels like kremlinology, here's ING's Angry Bird Dashboard.
The cheat sheet's name 'Angry Birds' is a reference to the computer game and evokes the doves
and the hawks who live in 'peaceful coexistence' at the ECB's governing council.
Here's an angry bird:
OPENING SNAPSHOT: STOXX INCHES UP (0819 GMT)
European shares have opened slightly higher today, supported by some well-received earning
broker notes, while a disappointing update hit Boskalis.
WHAT'S ON THE RADAR AHEAD OF THE OPEN (0758 GMT)
European shares are set to rise after the U.S. administration cooled investors’ trade war
fears with more conciliatory talk of potential carve-outs from the new tariff regime.
not to yield any significant changes in tone, with the central bank taking care not to rock the
boat amid jittery markets.
that of U.S. firms.
Hugo Boss is indicated down up to 5 percent in pre-market indications with traders pointing
M&A developments could also create heat today:
to sell its stake to Nissan.
EARLY MORNING EUROPEAN HEADLINES ROUND UP (0742 GMT)
Here are your top market-moving headlines this morning:
Chinese competition weighs on Merck KGaA's 2018 outlook
Akzo Nobel expects headwinds from material costs in 2018
EXCLUSIVE-Five banks open up trillion dollar gold club
Uniper profit drops on weaker gas optimisation business
Roche names Pao head of drugs research and early development
Hugo Boss upbeat for 2018 on brand shift to win young customers
Nissan says Renault-Nissan-M'bishi has no plans to change cross-shareholding ratio
Retailer Casino eyes further profit growth in 2018
France's JCDecaux sees slowing growth in first quarter
Univision Communications CEO to retire at year end
British estate agent Countrywide posts 22.5 pct drop in FY core earnings
French utility Engie surprises with 2018 dividend increase
Aviva plans 500 mln stg share buyback, 2017 profit up 2 pct
EUROPEAN STOCK FUTURES EDGE UP (0721 GMT)
European stock index futures have opened up slightly (+0.2-0.4%), as trade war fears
appeared to ease and the immediate focus shifted to the ECB's policy meeting later today.
RESULTS ROLL IN FROM AKZO NOBEL, MERCK, UNIPER (0650 GMT)
Some more earnings to keep an eye on today.
Paints maker Akzo Nobel plans to increase prices and cut costs as it expects
rising raw material costs to continue to weigh in 2018.
Merck points to intense competition from China for its liquid crystals used in
flat screens as a dampener for its earnings, which slipped 6.5 percent as a stronger euro also
percent stake, reported an 18 percent decline in full-year profit due to weaker performance from
its gas optimisation business.
And in the latest overnight development after Reuters' report yesterday that Nissan
was in talks to buy the French government's stake in Renault, the Japanese car company
its member companies.
"NOT MUCH NEW INFORMATION" EXPECTED FROM ECB (0632 GMT)
Societe Generale strategists don't see today's ECB meeting as likely to deliver any huge
revelations, partly due to the central bank stepping on eggshells in a more jittery market.
"The recent communication wobbles have largely been resolved, with the focus firmly on
market sensitivity, it is likely too early for the ECB to contemplate any changes in the APP
They reckon the new forecasts from the central bank could point to slightly higher growth
and inflation this year, but core inflation should remain unchanged.
"As before, we believe the ECB is moving dangerously slowly with its normalisation process,
not only running the risk of missing the window offered by the strong economic conditions but
also of undermining the role of monetary policy in future macroeconomic stabilisation efforts,"
MORNING CALL: TRADE FEARS FADE, EUROPEAN INVESTORS AWAIT ECB (0613 GMT)
European shares are set for a calmer trading day today as fears about a global trade war
fade, with the U.S. administration giving signs the tariffs could include carve-outs for key
In Europe all eyes will be on the ECB today as investors hope to glean further hints from
Mario Draghi about what will happen after September this year when the current bond-buying
programme is expected to come to an end.
The FTSE is called to open flat at 7,158 points, the DAX is seen opening 23 points higher at
12,268 points, and the CAC 40 is expected to gain 16 points to 5,204 points.