UK Markets closed

LIVE MARKETS-Selling bonds and rushing back into European stocks

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Joice Alves. Reach her on Messenger to share your thoughts on market moves: joice.alves.thomsonreuters.com@reuters.net



SELLING BONDS AND RUSHING BACK INTO EUROPEAN EQUITIES (1131 GMT)

It's over! After 85-consecutive weeks of outflows, European equity funds have finally returned to inflows, Morgan Stanley analysts write this morning in a strategy note.

As one could expect, the move into risk assets comes with flows for European bonds turning negative.

It doesn't change the picture for 2019 with so far $100bn of outflows from equities and $50bn of inflows into European bonds. It could, however, be a tipping point.

"We think we will see a resumption of European equity inflows as global equity investors increase exposure to the region and European asset allocators move some funds from bonds to stocks", they write.

It's not only an European things though. According to Bank of America Merrill Lynch and EPFR Global data, global equity funds received $7.2bn in the week to Wednesday and U.S. equities sucked in $2.6bn, their biggest weekly inflow in a month.

Looking into the latest batch of 2020 outlooks, analysts still seem torn over whether U.S. shares will continue to outperform their European peers in 2020.


(Julien Ponthus)

*****




TGIF: EUROPEAN SHARES EDGE HIGHER (0900 GMT)

European bourses are trading in positive territory this morning after Trump said trade talks with China were "moving right along".

The pan-European STOXX 600 index rose 0.2%, with banks, technology firms and retail companies leading the gains.

The bluechip London index rebounced with trade-sensitive financials and miners leading the recovery.

Germany's Dax was flat at the open after the country's industrial output fell unexpectedly in October, but the index quickly bounced back.

In terms of single stocks, France-based biopharmaceutical group Ipsen is on track for its worst day ever, down 24%, after it announced partial clinical hold for palovarotene ind120181 and ind135403 studies.

Here is a snapshot of European bourses this morning:

(Joice Alves)

*****



MIXED SIGNALS (0755 GMT)

Stock futures of most European bourses point to a slightly higher start as investors are feeling more confident the U.S. and China are closer to seal a trade deal after Donald Trump said yesterday talks with China were "moving right along".

But investors will also have fresh weak data to digest. German industrial output fell unexpectedly in October on a sharp drop in production of capital goods, pointing to persistent weakness in the backbone of the economy that may stabilise in the coming months, the Economy Ministry said this morning. On the corporate front, insurers will be under the spotlight after Phoenix announced its biggest-ever deal. It agreed to buy Swiss Re's ReAssure unit for $4.1 bln.

Homebuilders are also on our radar: Berkeley Group is seen down at the open after it reported a slump in first-half pretax profit. The company sold fewer homes at lower prices in the Brexit hit real-estate market.

On the small cap front, one trader sees Haynes up 10% after the company reported it expects HY adjusted profit before tax to finish ahead of prior year by c. 37%.

Associated British Foods is seen higher by one trader at the open as the company kept its FY forecast for earnings growth and said it plan further expansion of its Primark fashion chain. Other corporate stories:

WPP to return $1.2 bln to investors via repurchase after Kantar deal

Italy's Sanlorenzo prices IPO at 16 euros/share

AB Foods forecasts earnings growth in 2019-20 year

Telecom Italia, Open Fiber trade barbs over single network project

UK's CMA raises local competition concerns over Stonegate's takeover of Ei


(Joice Alves)

*****

EUROPEAN STOCKS SEEN HIGHER (0635 GMT)

European bourses are seen opening slightly higher this morning as investors are feeling more confident the U.S. and China are closer to seal a trade deal after the U.S. President Donald Trump said yesterday talks with China were "moving right along".

Trump's upbeat tone in comments was enough to spark buying across Asia overnight, despite a lack of agreement between the two countries over whether existing tariffs should be dropped as part of the "phase one" deal to end the 17-month trade war.

Financial spreadbetters at IG expect London's FTSE to open 18 points higher at 7,156, Frankfurt's DAX to open 56 points higher at 13,111 and Paris' CAC to open 23 points higher at 5,825.


(Joice Alves)

*****

(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)