LIVE MARKETS-Italian stocks break key resistance. Further to go?
May 2 - 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: helen.reid.thomsonreuters.com@reuters.net
ITALIAN STOCKS BREAK KEY RESISTANCE. FURTHER TO GO? (0944 GMT)
It looks like Italy will not hold early elections next month and investors like that,
further squeezing government bond yields and pushing the country's blue chip FTSE MIB
index above a key milestone which could prelude to further gains.
As you can see in the snapshot the FTSE MIB index has hit its highest level since October
2009, breaking a strong resistance, after a presidential palace source said President Sergio
Mattarella has ruled out the possibility of early elections in June, preferring instead to have
a new government in place to pass the 2019 budget.
"Everything that rules out a pure populist government and paves the way for something more
institutional that approves the budget is seen positively," a trader at a European bank says.
"The resistance (that has been broken) was solid and, if the European market allows for
that, there is room for more gains," he adds.
Earnings may also be giving a helping hand.
"Italy has delivered the strongest Q1 EPS growth so far, at 44 percent, but this is expected
to slow somewhat next quarter," says Deutsche Bank (IOB: 0H7D.IL - news) .
(Danilo Masoni)
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MORNING SNAPSHOT: INMARSAT (Other OTC: IMASF - news) , APPLE SUPPLIERS IN THE SPOTLIGHT (0753 GMT)
It's a strong start to European trading with the STOXX at its highest since Feb 5, boosted
by basic resource stocks (after strong factory data from China) and tech after Apple (NasdaqGS: AAPL - news) 's results
with iPhone sales coming in better than expected.
Apple's Germany-listed shares are up 5.9 percent in early deals, while iPhone supplier ams
is up 7.7 percent, with other chipmakers STMicro, Infineon (Xetra: 623100 - news) , BE Semiconductor, up 2.8 to 3.6
percent.
Inmarsat is also shooting up 10.2 percent after its revenues rose, and Lundin Petroleum (LSE: 0NNR.L - news) is
getting a 4.1 percent boost from strong results, continuing the trend among oil companies.
Energy stocks are providing the main boost to earnings, Deutsche Bank strategists say.
(Helen Reid)
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WHAT'S ON THE RADAR FOR THE EUROPEAN OPEN (0644 GMT)
Futures are pointing to a slightly positive open but nothing extravagant really despite
Apple’s strong results. One pre-market indication sees ams and the Apple supply chain rising on
these results.
The earnings season is still on in Europe and we have possible movers in a broad range of
sectors today:
Standard Chartered (BSE: 580001.BO - news) posted a better-than-expected 20 percent rise in pretax profit. Still in
the banking sector RBS’s job cuts and closure of branches could also have an impact. At
Barclays (LSE: BARC.L - news) , the chairman said he was not leaving the bank and that shareholders are backing the
CEO under a misconduct enquiry.
In the pharmaceutical sector, Denmark's Novo Nordisk (LSE: 0QIU.L - news) reported a posted first-quarter
operating profit above expectations and lifted the lower end of its 2018 sales and profit
outlook. Its shares are indicated up 2 to 3 percent.
In the luxury sector: Hugo Boss (IOB: 0Q8F.IL - news) strong sales growth in china and the US
In retail, watch for Ocado which signed a partnership deal with Sweden’s ICA, past deals
like this triggered sharp price moves and the shares are indicated up 2 to 5 percent in
pre-market calls.
Another positive earnings report in the energy sector with Swedish oil firm Lundin Petroleum
saying earnings were above forecast.
In basic materials Glencore (Frankfurt: 8GC.F - news) won a temporary injunction over alleged unpaid royalties, which
could boost the stock after the news made it fall sharply on Monday.
Yet more headlines showing how divided the UK government is about Brexit could also weigh on
the pound and possibly ease pressure on the FTSE. Data showing UK shop prices falling this
morning also furthers the case for no rate hike next week.
And of course euro zone GDP data out at 0900 GMT will be keenly watched for further signs of
slowing in the region's strong economic growth.
(Julien Ponthus)
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EUROPEAN FUTURES JUST SLIGHTLY UP (0710 GMT)
European futures have opened in slightly positive territory, but nothing extravagant as the
highest rise is for the FTSE with a 0.4 percent but the IBEX and CAC are flat.
Earlier indications from financial spreadbetters gave London 20 points higher, Frankfurt's
DAX to open 36 points lower and Paris 26 points lower.
(Julien Ponthus)
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