LIVE MARKETS-Closing snapshot: strong end to the week
* European shares end high
* STOXX 600 posts quarterly gain
LONDON, June 29 (Reuters) - Welcome to the home for real-time coverage of European equity
markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach
him on Messenger to share your thoughts on market moves:
julien.ponthus.thomsonreuters.com@reuters.net
CLOSING SNAPSHOT: STRONG END TO THE WEEK (1535 GMT)
European shares have ended the week on a strong note, shaking off worries over global trade
as the month and quarter come to an end.
Here's your snapshot of provisional closing prices:
(Kit Rees)
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WARMING TO VALUE (1428 GMT)
Deutsche Bank (IOB: 0H7D.IL - news) 's strategists have changed their view on European value stocks with a cheeky
upgrade to "overweight" from last February's "underweight".
They give a number of reasons for this, one being that they expect Euro area PMI momentum to
improve by early Q4 while a projected rise in the U.S. 10-year bond yield to a range of 3 to 3.2
percent should also be supportive.
If their forecasts come to pass, then the banking sector could be one to watch, especially
given that banks have been the worst sectoral performers so far this year with a loss of more
than 12 percent.
Here's a reminder of how much growth has outperformed value over the past years globally:
(Kit Rees)
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EURO ZONE HIGH, BREXIT SAME OLD (1301 GMT)
The day started on a high for the Euro zone and its currency with an immigration deal in
Brussels which eased worries that Merkel's coalition might not survive the summer or that
Italy's populist government would obstruct EU institutions and dealmaking.
Looking at today's research, there's no shortage of good vibes for the bloc which now seems
to have successfully handled the sovereign debt crisis that put its very existence in jeopardy
just a few years ago.
First (Other OTC: FSTC - news) , both UBS (LSE: 0QNR.L - news) and HSBC both had nice things to say about Greece's five-year bonds after
the country won its a debt relief deal.
"Greece could benefit from ratings upgrades and carries very positively," the latter wrote.
Berenberg listed reasons to be optimistic for Greece's economic prospects and noted
implemented labour and structural reforms, improved competitiveness, reduced deficits, and
support from Brussels to invest in its economy.
On a broader note, it also showed how bailed out euro zone countries have recovered since
the crisis:
Taking a look at Italy, UBS believes that the improvement of the banking sector, notably its
ability to dump bad debt, is resilient despite its new government.
"Our conversations with both servicers and banks suggest that NPL disposal
projects are progressing according to plan and we have not seen any material adverse price
implications post elections," it said.
A Jefferies note on the Spanish banking sector was also quite positive. While they only have
one buy - Caixabank (Amsterdam: CB6.AS - news) - they argue that "the economic backdrop remains supportive" even if there
is too much reliance on future rising rates to improve profitability.
One area with very little progress today is Brexit, with the EU still asking Theresa May to
come up with "workable" proposals to prevent Britain from crashing out of the bloc without a
deal.
Thinking about it, Belgium's victory against England yesterday might count as a proxy-win
for the Euro zone, given that so many EU leaders were happy to flash Belgian supporter scarves
in front of the press as they arrived in Brussels.
See also:
Belgian PM scores early points vs England among EU leaders
Hazard at No.10: Belgian PM's World Cup dig at May
LIVE MARKETS-Evil contrarian bets against England
(Julien Ponthus)
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BUBBLE TROUBLE: COULD A BREWING CO2 SHORTAGE HURT DRINKS STOCKS? (1236 GMT)
It's been the talk of the town recently: a shortage of CO2 across Europe which could
jeopardise pubs' and bars' efforts to capitalise on the surge in thirsty customers around the
World Cup. But what might the impact be on drinks makers?
"The problem is most significant in the UK because very few domestic gas producers are
operating at normal levels... and imports are relatively limited," Berenberg writes.
They reckon a shortage would most heavily affect AG Barr, Britvic (Stuttgart: A0HMX9 - news) ,
Fevertree and even meat supplier Cranswick (LSE: CWK.L - news) which uses CO2 to process animals
and for packaging.
However, thus far they've been receiving enough CO2 to maintain production and supply
customers, Berenberg says after discussions with the firms.
The analysts recommend investors take advantage of any weakness caused by the CO2 shortage
to buy Cranswick, Fevertree and The City Pub Group.
Here's more to quench your thirst:
Looming beer shortage risks leaving England's World Cup fans gasping
Crate expectations: Moscow shops stockpile beer for World Cup fans
And a reminder of Fevertree's stellar performance since listing in 2014:
(Helen Reid)
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LUNCHTIME SNAPSHOT: HEADING INTO THE WEEKEND ON A BRIGHT NOTE (1211 GMT)
There hasn't really been much change since the morning for European stocks, with indexes
still up around 1 percent heading into the weekend (and the end of the quarter).
Good old tech is the top-gaining sector, while financials and industrials are giving the
biggest boost to the STOXX.
Over in the U.S., stocks futures are also on the up, notwithstanding lingering trade
tensions.
"Generally, equity returns on the week have been flat, with reasonable levels of volatility
as confusing signals on global trade kept coming from the White House," Martin Newson, CEO and
CIO at Optimus Capital, said.
"Equity volatility increased because investors have seen the trade talks become more
erratic."
Here's your lunchtime snapshot:
(Kit Rees)
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SOCGEN (Paris: FR0000130809 - news) , BNP GET THINNER SLICE OF SHRINKING FRENCH M&A PIE (1126 GMT)
There are quite a few surprising facts to be found in the data dug out this morning by
Thomson Reuters (Dusseldorf: TOC.DU - news) ' Deals Intelligence team.
First, while there's been a global surge in M&A since the beginning of the year, up about 60
percent as of June, there's been a big slump in France, which is supposed to be the
fast-recovering former sick man of Europe.
See for yourself below, it somewhat doesn't fit the Macron recovery narrative very well:
Second thing, SocGen and BNP Paribas (LSE: 0HB5.L - news) , which would be expected to rule on their home turf,
have seen their market share plunge within a year to both local and U.S. rivals, which is bound
to trigger some kind of irritation, especially towards the latter.
BNP (Paris: FR0000131104 - news) bankers have fallen from the number one spot to the ninth, while SocGen's M&A team is
now ranked 15th, from the eighth position a year ago:
(Julien Ponthus)
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WHAT'S ON THE RADAR AT THE EUROPEAN OPEN (0651 GMT)
The rebound in Asia is spreading to Europe but this is most likely only a temporary respite
as China easing some foreign investment restrictions is by no means the end of the trade war
saga. Futures point to European bourses rising up to one percent. This month and this week will
however close on a loss even if Q2 will post a gain.
A deal struck by EU leaders on immigration is also a big relief for investors as it means
Merkel will leave Brussels with a win, allowing her to solidify her coalition.
On the downside, the rise in the euro that followed the deal may deliver a headwind to
European stocks.
Among possible movers, Deutsche Bank failed Fed stress test but as Goldman notes, "this was
expected, in our view, and we see no material change to our view".
Belgium's Galapagos (LSE: 0JXZ.L - news) is seen plunging at the open on the back of disappointing drug results.
Other possible movers include France's Accor (EUREX: 485822.EX - news) buying half of Sam Nazarian's SBE, HelloFresh
which may sell ready-made meals online, the Daily Mirror publisher expecting a 11 percent
revenue rise.
More gloomy headlines for car makers as VW's labour boss says EU C02 rules could ruin
profits.
(Julien Ponthus)
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FUTURES POINT TO A BULLISH OPEN (0612 GMT)
European futures have started trading and they point to a strong open, particularly in
Germany where they are rising nearly one percent.
Looking at the bigger picture, even a rally today won't change the fact that this week and
this month will close on a loss for the pan-European STOXX 600.
On the bright side, the second quarter of 2018 will end on a win.
(Julien Ponthus)
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STOCKS FACE EURO SPIKE AS EU STRIKES IMMIGRATION DEAL (0544 GMT)
Good news and bad news for European stocks markets: while EU leaders struck a deal on
immigration, thereby helping Merkel stabilize her coalition and ease German political risk, the
resulting surge in the euro may provide some headwind for European stock markets this morning.
"The migrant crisis in Europe threatened German Chancellor Angela Merkel’s fragile
coalition, which was in danger of collapsing if she left the summit without a deal", commented
Jasper Lawler, head of research at London Capital Group, noting that "the euro picked up from
1.157 to 1.162 in the space of a few short minutes".
The euro is currently up 0.7 percent.
(Julien Ponthus)
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MORNING CALL: EUROPEAN BOURSES SEEN RISING AFTER ASIA'S REBOUND (0527 GMT)
European bourses are set to rise in the wake of Asia's overnight rebound with trade war
fears easing somewhat. Asian markets rallied from nine-month lows helped by China easing
foreign investment limits, but this is likely to be only a temporary respite a week before
initial U.S. and Chinese tariffs are set to take effect.
Financial spreadbetters expect London's FTSE to open 40 points higher, Frankfurt's DAX to 88
points up and Paris' CAC to rise 36 points at the open.
In other news, England lost 1-0 to Belgium to finish second in World Cup Group G.
(Julien Ponthus)
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