LIVE MARKETS-What you need to know at the open
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share your
thoughts on market moves: josephine.mason.thomsonreuters.com@reuters.net
WHAT YOU NEED TO KNOW AT THE OPEN (0659 GMT)
European stocks are expected to open slightly higher as investors continue to draw comfort
from the European election results, news of Renault-Fiat tie-up talks and take a breather from
the U.S.-China trade tensions.
Futures are off their earlier highs but are up between 0.1-0.3%, extending yesterday’s
gains.
Still there may be further pressure on Italian banks and the Milan bourse amid fresh worries
over a clash between Rome and Brussels over Italy's budget. The index and sector were knocked
lower yesterday after news that the European Commission is considering taking disciplinary
action next week for the country's failure to rein in its budget.
The Greek PM’s call for a snap election, which sent stocks soaring yesterday, and Austria’s
deepening political crisis, which pushed Vienna stocks lower, will continue to draw investor
attention to smaller euro-zone markets.
News that may send shivers through some major sectors: KLP, Norway's largest pension fund,
has said this morning it has sold about $320 million of shares in gambling and alcohol companies
and has added the sectors to its exclusion list.
Among the excluded companies are casino group Wynn Resorts, online gambling firm
Betsson, spirits and beer maker Diageo and brewers such as Carlsberg
and Heineken.
While the value is relatively small on a per-company basis, the move is the latest sign that
some pension funds and big investors are giving greater scrutiny to how companies they invest in
make their money.
In dealmaking, Galliford shares are expected to jump after news broke that Bovis approached
the UK house builder about a possible bid. Galliford rejected the move, but the potential
dealmaking may inject some action into the UK housebuilder sector, which has been hammered by
worries about the damage from the country's protracted and chaotic Brexit.
(Josephine Mason)
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European stock future are signalling a strong open as investors continue to draw comfort
from the European election results, news of Renault-Fiat tie-up talks and a dearth of major news
on U.S.-China trade tensions. Futures are off their earlier highs but are up between 0.1-0.3%.
There may be more pressure on Italian banks which were hit yesterday amid fresh worries over
a clash between Rome and Brussels over Italy's budget after news that the European Commission is
considering taking disciplinary action next week for the country's failure to rein in its
budget. That wiped out Milan's Fiat-Renault induced gains.
Another piece of news that may send shivers through some major sectors: KLP, Norway's
largest pension fund, has said this morning it has sold about $320 million of shares in gambling
and alcholol companies and has added the sectors to its exclusion list.
Among the excluded companies are casino group Wynn Resorts, online gambling firm
Betsson, spirits and beer maker Diageo and brewers such as Carlsberg
and Heineken.
While the value is relatively small on a per-company basis, the move is the latest sign that
pension funds and investors in general are scrutinising their investments more.
A takeover move by Bovis for Galliford may inject some action into the UK housebuilder
sector, which has been hammered by worries about the damage from the country's protracted and
chaotic Brexit. Galliford's shares are seen rising on the news.
ON OUR RADAR: GAMBLING AND BOOZE (0619 GMT)
Relief about the European election results, news of the Renault-Fiat tie-up talks that also
boosted Asian carmakers overnight and a lack of major news on the U.S.-China trade conflict are
lifting European stocks. The major stock futures are showing decent gains, all up between
0.4-0.5% and Wall Street futures are indicating a positive open.
Data just out may put a dampener on things: the GfK consumer sentiment indicator showed
German consumer morale cooled heading into June to its lowest level in more than two years as
shoppers became less willing to buy and more downbeat about the growth outlook of Europe's
largest economy.
It's relatively quiet so far on the corporate news front.
One piece of news that stands out so far and may send shivers through some major sectors,
KLP, Norway's largest pension fund, has said this morning it will no longer invest in gambling
companies and alcohol makers.
Among the excluded companies are casino group Wynn Resorts, online gambling firm
Betsson, spirits and beer maker Diageo and brewers such as Carlsberg
and Heineken.
In dealmaking, Vivendi's pay-TV group Canal Plus says it will buy European rival M7 for
about 1 billion euros ($1.1 billion) from private equity firm Astorg in a bid to boost its
European reach.
More headaches for German banks as regulators will require the country's banks to set aside
more provisions from July to cover risks stemming from a pumped up domestic property market and
slowing economy, a move criticised by the sector.
Headlines so far:
Aviva eyes split of UK business as part of shake-up - FT
Britain's Galliford rejects Bovis Homes bid for home building arm
Cash stays king as nervous investors stash dough ahead of summer lull
UBI Banca investor group nearly doubles stake to 6.94%
Norway's KLP bans alcohol, gambling investments from pension funds
Vivendi's Canal Plus to buy M7 for 1 bln euros to expand its European reach
China's Baoshang Bank takeover raises contagion fears
Alibaba plans $20 bln HK listing, biggest follow-on sale in 7 yrs -sources
EXPLAINER-Will China dump U.S. bonds as a trade weapon? Not so fast
EXCLUSIVE-IKEA to revamp app as store strategy shifts
(Josephine Mason)
*****
EUROPE SEEN FIRMER (0521 GMT)
European stocks are expected to open higher again today, extending yesterday's gains and
taking their cues from Asian stocks overnight as investors take a breather from the U.S.-China
trade tensions.
"The markets are pausing for breath from the trade tensions story but this should change as
we move towards the G20 where hopes of a resolution should intensify," says Jasper Lawler, head
of research at London Capital Group.
There may be some residual impact from the European election results yesterday and turnover
will be higher as the UK and U.S. return from bank holidays.
Investor focus will remain firmly on Italy amid renewed tensions over the country's budget
deficit that slammed banking stocks yesterday. That followed news yesterday that Brussels is
considering taking disciplinary action next week for Rome's failure to rein in its budget,
wiping out Milan's gains driven by the Fiat-Renault tie up news.
Financial spreadbetters IG expect London's FTSE to open 28 points higher at 7,306,
Frankfurt's DAX to open 19 points higher at 12,091, and Paris' CAC to open 5 points higher at
5,342.
(Josephine Mason)
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(Reporting by Danilo Masoni, Helen Reid, Josephine Mason and Thyagaraju Adinarayan)