* European shares supported by oil stocks
* Italian stocks hit as budget tensions resurface
* Tech stocks weigh on Wall Street
Sept 12 - 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: firstname.lastname@example.org
CLOSING SNAPSHOT: STOXX AT ONE-WEEK HIGH (0452)
After hitting five-month lows last week, the rebound in Europe is gaining steam with strengh
in energy stocks helping push the STOXX 600 up 0.5 percent to a one-week high.
Here's your closing snapshot:
UK STOCKS: HOW TO NAVIGATE BREXIT NEGOTIATIONS (1451 GMT)
optimism around the UK and especially sterling, though markets remain hyper-sensitive to any
changes in the tone of negotiations as the deadline approaches.
We've written previously about value investors circling around cheap UK stocks, but some say
the price is still not adequately compensating for the risks.
"UK stocks look under-owned and attractively valued but a catalyst is missing for a sharp
"Energy weighs circa 20 percent of UK market cap, which helps earnings, but EM exposure is a
headwind," they add in a note titled "Navigating troubled waters".
On top of this, a stronger pound adds pressure to the FTSE 100 whose companies derive most
of their earnings abroad.
However, the strategists still prefer exporters, though they acknowledge domestic plays
could enjoy a rebound on more positive Brexit news.
Overall they reckon a "crash out" of the European Union is still an unlikely outcome, which
if it comes to pass, could turn the correlation between sterling and UK stocks positive as both
Here's Barclays' handy chart - or "choose your own adventure" - of where things could go
IT REALLY IS A BUMPY RIDE IN ITALY (1253 GMT)
Analysts had warned that it was going to be a bumpy ride for Italian assets going into the
budget announcement at the end of the month. And they were right!
Worries over Rome's spending plans have eased recently, fuelling a recovery in Italian
stocks and bonds, but some headlines today saying economy minister Tria could be
forced to quit caused some pretty turbulent moves in Italian stocks and bonds.
The FTSE MIB took a 1.4-percent leg lower after ANSA said 5-Star would seek Tria's
resignation if they did not get 10 billion euros to create a universal income for the poor. The
report was denied and the blue chip index recovered rapidly.
And here's your snapshot with main European country indexes.
INVESTOR VIEW: GROWTH WITHOUT THE HIGH VALUATIONS (1220 GMT)
For growth-focused investors it hasn't been easy to avoid paying over the odds for the
Growth companies which have been market leaders - and hence very popular picks - over the past
We just spoke to one fund manager who focuses on European companies with more than 10
percent earnings growth, high barriers to entry, and visibility on growth.
"We end up having quite significant weights in sectors like healthcare, consumer, IT, and we
tend to be underweight banks and financials," says Alistair Wittet, European equities portfolio
manager at Comgest.
Indeed he says his funds - pan-European, smaller European companies, and Europe ex-UK - own
no banks, autos, or oil & gas stocks, instead focusing on the areas considered "growth".
But global uncertainty, and a significant outperformance of Growth over Value (see below)
has accelerated flows going into these growth and defensive sectors, pushing prices up.
"There are pockets of the market where valuations have reached historically quite elevated
levels," notes Wittet, adding: "We have been reorienting our portfolio to invest in those stocks
where we haven't seen valuations expand so extremely."
On the record outperformance of Growth, Wittet says "by definition it can't continue", but
he doesn't see any clear triggers for a Value comeback any time soon.
DON'T NEGLECT UTILITIES, AND WATCH OUT FOR THE CATALYSTS! (1041 GMT)
The profit warning from SSE is making utilities the worst sectoral performer today
but in a market dominated by a diverse range of geopolitical and economic concerns, the
defensive nature of the often overlooked industry can be a plus.
No surprise then that some market players are turning more constructive on the sector.
due to a difficult operating environment, falling commodity prices and political intervention.
"So what has changed? We now see some upside to consensus, and we expect the sector's 2020
EPS to move higher as consensus reflects current forward prices and updated business plans,"
analysts at the U.S. investment bank say.
They see growth remaining strong at 11 percent in 2019 and 2020.
And the good news is that there are also catalysts ahead:
* The end of the coal negotiations in Germany, resetting of allowed returns in Italy, and
energy transition law could remove overhangs
* Going into winter, risks to power prices remain tilted to the upside, which should be
for the sector
OPENING SNAPSHOT: RISK APPETITE RETURNS, GALAPAGOS TOPS STOXX (0755 GMT)
European shares are bouncing back somewhat this morning with gains of 0.1 to 0.5 percent,
boosted by strong oil and mining stocks.
trial results for its filgotinib drug to treat rheumatoid arthritis.
SSE is down more than 9 percent after warning its first-half profit would halve.
Meanwhile Inditex and Hermes are both rising after strong results. The Zara owner is up 2
percent after it said it saw margin growth in the second half.
Hermes shares are up 2 percent after it reported record first half margins.
rumours which the company's spokeswoman has denied, saying the Ferragamo family - the top
shareholder - does not want to sell its stake.
Stock futures in Europe are rising in early trading, indicating markets could muddle through
despite a weaker Asian session as investors fret about the latest ramp-up in rhetoric on trade
between Beijing and Washington, with President Trump saying the U.S. is taking a “tough stance”
Oil stocks are likely to support benchmarks after crude prices were boosted by declining
U.S. crude stockpiles.
On the corporate front, Inditex results could move shares in the Zara owner. Its first-half
earnings and sales missed expectations and the company changed its way of disclosing sales
growth, a shift which analysts at Berenberg said could raise questions and be taken negatively.
Hermes is seen flat to 1 percent higher after reporting record first-half margins, with
traders also comforted by the CEO saying there has been no change so far in sales in China.
chief operating and financial officer has left. IWG’s shares fell last month after it abandoned
talks with three suitors.
And a profit warning from British energy provider SSE could also likely hurt the stock with
one trader calling it down 5 to 10 percent after it warned first-half results would be cut by
half, blaming the fall on dry, still and warm weather and high gas prices.
contracts to build turbines in South Africa.
FUTURES RISE AS EUROPEAN STOCKS SET TO MUDDLE THROUGH (0615 GMT)
Futures are up, contrary to spreadbetters' expectations, between 0.2 and 0.4 percent,
indicating markets could struggle through today despite a weak Asian session overnight.
But the latest developments on the Brexit front and within the UK government will keep
investors on edge.
In his State of the Union speech, Jean-Claude Juncker is set to say Britain should not
expect EU negotiators to soften demands, but he will reaffirm an offer of a close future
partnership, a senior EU official said.
And there are new signs of dissent in the UK government with the BBC reporting about 50
Conservative lawmakers have met to discuss how and when they could oust May from power.
The latest UK corporate headlines:
Superdry appoints ex-Tommy Hilfiger exec Brigitte Danielmeyer chief product officer
Indivior Reiterates FY Sublocade Net Revenues Of $25 Mln-$50 Mln
John Laing Environmental Assets to raise 50 mln stg via new shares
EARLY MORNING HEADLINE ROUND-UP: INDITEX, RYANAIR, HSBC IN FOCUS (0554 GMT)
On the slate today we have European Commission President Jean-Claude Juncker's last State of
the Union ,seven months before the European Parliament is dissolved.
"He will call for a comprehensive response to U.S. protectionist threats, with ideas how to
On the corporate and general news front here are a few of the main headlines:
Zara owner Inditex H1 profit up 3 pct on year
HSBC to bolster Asia private banking headcount, double client assets
Wrong Brexit will cost tens of thousands of car jobs, warns Jaguar boss
Former Volkswagen boss dragged feet in emissions scandal - judge
Ryanair pilots, cabin crew in Germany stage strike
UK Supermarket chain Morrisons faces equal pay claims worth 1 billion pounds
MORNING CALL: TRADE WORRIES TO SINK STOCKS FURTHER (0531 GMT)
European stocks are set to fall further this morning after Asian markets took a deeper dive
on the latest escalation in rhetoric between the U.S. and China.
Asian stocks slipped to 14-month lows as investor confidence was chilled by the latest round
of verbal threats in an intensifying U.S.-China trade conflict.
China told the World Trade Organization (WTO) on Tuesday it wanted to impose $7 billion a
year in sanctions on the United States in retaliation for Washington's non-compliance with a
ruling in a dispute over U.S. dumping duties started in 2013.
Separately, U.S. President Donald Trump told reporters on Tuesday that the United States was
taking a tough stance with China.
Financial spreadbetters expect London's FTSE to open 5 points lower at 7,268, Frankfurt's
DAX to open 16 points higher at 11,986 and Paris' CAC to open 11 points higher at 5,294.
(Reporting by Helen Reid, Danilo Masoni, and Julien Ponthus)