LIVE MARKETS-Midsession update: STOXX hits day's low
* European shares fall as Syria anxiety takes hold
* Tesco (Frankfurt: 852647 - news) jumps 6 percent after beating profit guidance
* Telecoms boosted by Deutsche Telekom (IOB: 0MPH.IL - news) on new Sprint merger talks
April 11 (Reuters) - Welcome to the home for real-time coverage of European equity markets
brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on
Messenger to share your thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net
MIDSESSION UPDATE: STOXX HITS DAY'S LOW (1147 GMT)
As we draw nearer to the release of the hotly-anticipated U.S. inflation data, European
shares have hit a session low after a tweet from U.S. President Donald Trump warned that
missiles "will be coming" in Syria.
U.S. stocks futures have also extended losses while safe-haven gold is at a session high as
are oil prices.
Here's your snapshot:
(Kit Rees)
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APPETITE FOR TECH REMAINS DESPITE FACEBOOK SCANDAL, ETF DATA SHOWS (1132 GMT)
Just after Facebook Chief Executive Mark Zuckerberg finished navigating through a
five hour U.S. congressional grilling, ETF data shows there is no lack of appetite for American
tech stocks.
"Surprisingly, flows in the technology sector remained unscathed by the Facebook (NasdaqGS: FB - news) scandal,"
SocGen (Paris: FR0000130809 - news) analysts commented in a note this morning, referring to the fall in the social network's
share price after it came to light that up to 87 million users' personal information was
harvested by Cambridge Analytica.
Seems BlackRock's Turnill (see post below) call that there is no "tech wreck" on the horizon
might be proved right.
Here's SocGen's chart:
And here's Facebook share price since the Cambridge Analytica scandal made headlines:
(Julien Ponthus)
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NO "TECH WRECK" JUST YET (1014 GMT)
That's the view from BlackRock (Sao Paolo: BLAK34.SA - news) 's global chief investment strategist Richard Turnill, who
sees strong earnings growth driving future returns for the sector.
"We believe recent weakness reflects rising risks but is not a tech wreck in the making.
Strong fundamentals underpin our preference for the sector," says BlackRock's Turnill in a note.
Turnill cites sales growth for the global tech sector, which is seen outstripping that of
the broader market (see BlackRock's chart below), and also an expectation that we're going to
see a "wave" of business investment into tech equipment and services.
"Our text analysis of corporate conference calls suggests companies across industries are
looking to deploy their tax windfalls on tech spend. This could spur more upgrades for tech
sales," says Turnill.
Meanwhile in tech land, we've got day two of Facebook CEO Mark Zuckerberg's testimony,
scheduled for 1400 GMT later today...
(Kit Rees)
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VIEW FROM THE BUYSIDE: TOO SOON TO PICK TRADE WAR WINNERS (0957 GMT)
While focus has shifted slightly today to escalating tensions in Syria, investors are still
picking apart the implications of likely trade tariffs between the U.S. and China, which could
result in relative advantages for some European firms trading with China.
Valentijn van Niewenhuijzen, chief investment officer at NN Investment Partners, told us
it's too early to make any specific plays on this.
On whether there could be European winners from a trade war, he says "I have no doubt that
is the case."
"Everything is always around relative prices," he adds.
"Although the overall impact of a potential trade conflict I am convinced is a negative, the
way that this negative is distributed across sectors, companies, and consumers is of course very
different and obviously some exporters in other countries that like to bring their goods to the
Chinese market would benefit if access for the U.S. to that market is constrained."
But the situation is too fluid to take any active positive positions on individual countries
or sectors, van Niewenhuijzen says.
"We haven't specifically tilted towards any specific European companies... That might change
if we get a bigger conviction on how it pans out."
Van Niewenhuijzen also reckons the idea that the U.S. has the upper hand is incorrect. "They
have a very worthy opponent in terms of negotiation," he says, adding that China has more room
to play hardball than the U.S., with mid-term elections approaching.
"I think China can stomach a lot more pain as a result of this than the U.S.; will not
be worried to have some pain if he feels it's needed to win this game."
(Helen Reid)
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FTSE KEEPS STIFF UPPER LIP AS UK FACTORY OUTPUT UNEXPECTEDLY DROPS (0918 GMT)
The first drop in British manufacturing output in almost a year and a fall in construction
output has been met with no shortage of phlegm on the markets with the FTSE rising a notch in
sync with a slightly retreating pound:
This fresh new batch of worse-than-expected indicators is bound to reinforce the views of
the bears for whom the narrative of "global synchronised growth" is dead and buried,
particularly in light of negative trends for earnings revisions and this week's global PMI data:
(Julien Ponthus)
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OPENING SNAPSHOT: IN THE RED (0724 GMT)
Europe's shares have opened in the red today as heightened geopolitical tensions over Syria,
with air strikes looming, make investors more cautious.
Top gainers are Tesco, boosted up 4.3 percent after it beat guidance with a strong full-year
profit increase, and Deutsche Telekom, up 4.1 percent after Sprint Corp restarted talks to merge
with its T-Mobile unit.
Commodities are back to being a drag on the market today, with oil prices hit by the Syria
developments.
Travel stocks are also among the worst-performing, with Carnival (LSE: CCL.L - news) , Intercontinental Hotel
down 1 to 1.9 percent on the FTSE 100 and budget airlines Ryanair and easyJet also falling.
Escalating tensions in Syria could be weighing on the stocks after Eurocontrol warned airlines
to exercise caution in the eastern Mediterranean due to possible airstrikes in the next 72
hours.
In a bit of a reversal of trend for UK retail, shares in the fast-growing online fashion
brand Asos (LSE: ASC.L - news) are sinking 10 percent after the company said it would invest more, and
reported sales and profit slightly under analysts' expectations.
(Helen Reid)
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WHAT'S ON OUR RADAR BEFORE EUROPE OPENS (0653 GMT)
European shares are set to open lower, giving back part of the gains seen on Tuesday, as the
soothing effect of Chinese President Xi's speech fizzles out and investors turn their focus on
the U.S. inflation data and Fed minutes due later in the day. Futures on main European stock
benchmarks are down 0.3 percent.
On the corporate front, reports that Sprint has restarted talks to merge with Deutsche
Telekom unit T-Mobile could lift shares in the German telecoms operator, which are indicated up
2 percent in pre-market. Sources told Reuters that Sprint and T-Mobile decided to restart talks
partly because they want to share the financial burden of investing in their networks. Investors
are starting to look again at battered telecoms stocks, as valuations are starting to become
attractive after years of underperformance.
Sky (Frankfurt: 893517 - news) is expected to open lower, down 1 percent pre-market, after news the European Commission
raided the offices of a number of companies involved in sports broadcasting rights, including
Fox Networks Group, a unit of Rupert Murdoch's Fox, which is battling to take over the British
pay-TV company.
In earnings, Tesco beat guidance with a 28 percent rise in full-year profit, underlining the
recovery of Britain's biggest retailer under Chief Executive Dave Lewis. Its shares are up 2-3
percent in premarket.
Other stock movers:
Hammerson (Frankfurt: 876140 - news) advises shareholders to reject new Klepierre (LSE: 0F4I.L - news) bid of 635 pence (up 10 pct
pre-market)
MSCI (Frankfurt: 3HM.F - news) may delete Sulzer (IOB: 0QQ9.IL - news) from indexes amid new U.S. sanctions (down 1.7 pct pre-market)
Lufthansa (Xetra: LHAB.DE - news) , easyJet submit revised offers for Alitalia (Stuttgart: 2278962.SG - news)
Fiat Chrysler, U.S. Justice Dept in diesel emissions settlement talks
Barry Callebaut (IOB: 0QO7.IL - news) confirms targets after H1 results beat expectation (up 1 pct pre-market)
Aramco signs $12 bln worth of deals with France's Total (LSE: 524773.L - news) , Technip (LSE: 0IEB.L - news) and Suez
Google in talks to buy Nokia (Milan: 23568.MI - news) 's airplane broadband business - Bloomberg
New GSK shingles vaccine off to strong start in key U.S. market
Tesco beats guidance with 28 pct full-year profit increase (up 2 percent pre-market)
Online retailer ASOS ups investment as sales grow 27 pct
(Danilo Masoni)
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DAX, FTSE FUTURES FALL SLIGHTLY (0618 GMT)
European shares are set to give back part of the gains seen yesterday with stock index
futures pointing to declines of around 0.3 percent for top regional benchmarks DAX and FTSE.
Michael Hewson, Chief Market Analyst at CMC Markets UK, says that after Chinese President
Xi's speech soothed market jitters over a possible trade war yesterday, investors may now want
to see evidence of action following words.
"... for equity markets to regain a sense of equilibrium we need to start to see progress on
the road away from a potential trade war, and currently there is no evidence of that
whatsoever," he says in his morning note.
Later in the session the focus will turn to the U.S. CPI and the Federal Reserve minutes.
Here's your snapshot:
(Danilo Masoni)
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EARLY MORNING HEADLINE ROUNDUP (0556 GMT)
EU carries out antitrust raid at firms dealing with sports media rights
Unit of Murdoch's Fox says cooperating with Brussels inspection
UPDATE 6-Sprint in new talks to merge with T-Mobile -sources
Lufthansa, easyJet submit revised offers for Alitalia
Air France-KLM (LSE: 0LN7.L - news) says has no interest in bidding for Alitalia
Fiat Chrysler, U.S. Justice Dept in diesel emissions settlement talks
UPDATE 1-Barry Callebaut confirms targets after H1 results beat expectation
Britain's M&C Hotels picks industry veteran Jennifer Fox as new CEO
Aramco signs $12 bln worth of deals with France's Total, Technip and Suez
Google in talks to buy Nokia's airplane broadband business - Bloomberg
New GSK shingles vaccine off to strong start in key U.S. market
Eni CEO says Q1 oil and gas production rose 4 pct
Anglo American (LSE: AAL.L - news) fined $21 mln for Brazil pipeline leaks
UPDATE 2-Boeing (NYSE: BA - news) beats Airbus on Q1 jetliner data, rejigs backlog
INTERVIEW-Telefonica Brasil (Sao Paolo: R2:VIVT3S.SA - news) to expand ultra-fast broadband to 20 new cities
BRIEF-Air Liquide Signs Long-Term Contract With LyondellBasell In The U.S.
German state of Lower Saxony eyes possible cash infusion for NordLB
EXCLUSIVE-Rusal (HKSE: 0486-OL.HK - news) triggers Iran-style defence after U.S. sanctions - source
UPDATE 3-Hundreds of flights cancelled in Germany as airports hit by strikes
German minister rejects joint fund with industry to refit diesel cars
Sanctions expected to prevent Rusal from servicing Eurobond
UPDATE 2-Rio Tinto (Hanover: CRA1.HA - news) reviewing Rusal ties, mum on Queensland venture
UPDATE 2-Brazil court orders Hydro to set aside $44 mln for cleanup
Air France (Paris: FR0000031122 - news) raises pay offer in bid to end strikes
Rusal director Glasenberg quits, bonds slump as U.S. sanctions bite
NEWSMAKER-Cost-cutter Diess seen driving change as Volkswagen CEO
BREAKINGVIEWS-New VW boss would only part-solve its problems
(Danilo Masoni)
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MORNING CALL: EUROPEAN SHARES SEEN LOWER (0520 GMT)
European shares are expected to open higher today with the U.S. CPI and the Federal Reserve
minutes likely to be in focus later in the day. On Tuesday the STOXX 600 rose 0.8 percent.
Financial spreadbetters expect London's FTSE to open 24 points lower at 7,242, Frankfurt's
DAX to open 47 points lower at 12,350 and Paris' CAC to open 14 points lower at 5,293.
Over in Asia, stocks rose modestly, paring earlier gains as optimism that trade ties between
Washington and Beijing were on the mend gave way to questions about the next phase of the
diplomatic tit-for-tat between the two countries.
(Danilo Masoni)
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