LIVE MARKETS-UK equities fans, please form an orderly queue
* European stocks rise
* ECB meeting in focus later
LONDON, April 26 (Reuters) - 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
UK EQUITIES FANS, PLEASE FORM AN ORDERLY QUEUE (1020 GMT)
The trend is going mainstream: more and more brokers - today it's Credit Suisse (IOB: 0QP5.IL - news) , Monday it
was Deutsche Bank (IOB: 0H7D.IL - news) - are advising their clients to return to the British stock market.
"The UK ranks as the second cheapest major region after Japan", the Swiss bank said in an
equity strategy note this morning, citing a positive macro outlook and its belief that "the
Brexit discount should fall".
Credit Suisse argues that an early general election is unlikely but that there is, however,
a risk that the pound will rise and weigh on British shares.
The broker believes that banks, retail, big cap oils and mining, tobacco and spirits offer
attractive opportunities.
Like it was said at the beginning of the month, the euro zone versus UK trade is becoming
sooo 2017!
Here's Monday's story:
Deutsche Bank joins growing swell of optimism for UK stocks
(Julien Ponthus)
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WHAT TO WATCH BEFORE THE EUROPEAN OPEN (0652 GMT)
A timid bounce is in store for European stocks on Thursday as investors’ focus turns back to
earnings, dissipating anxiety over rising U.S. bond yields which had sent the benchmark STOXX
600 to its lowest in a week.
In a crowded field for results, oil majors Total (LSE: 524773.L - news) and Royal Dutch Shell (LSE: 0LN9.L - news) stand out with
profits soaring on stronger crude prices and record output.
Deutsche Bank shares are seen falling 2.8 percent at the open after the bank
announced cutbacks to its bond and equities trading in a major overhaul of its troubled
investment bank, after reporting a 79 percent drop in net profit in the first quarter.
"Despite guidance that it expected to be flat to down in 1Q18 depending on the business
area, results are weaker than expected with revenues and costs both missing," writes a trader.
"Key will be the conference call where market will look to question new CEO on his vision for
the bank and how the cuts to the CIB will impact both revenues and costs."
A negative market reaction is also in store for mobile equipment maker Nokia (Milan: 23568.MI - news) ,
which reported a sharp fall in quarterly profit as telecom operators held off spending. Its
shares are seen down 4 to 7 percent.
Bollore Group could suffer further share price losses after French tycoon Vincent
Bollore (Paris: FR0013201365 - news) was placed under formal investigation Wednesday evening in a probe over allegations of
corruption in his West Africa logistics empire. The stock is down 8 percent since Tuesday’s
open, the day news broke that police were questioning Bollore, who is also chairman of Vivendi (LSE: 0IIF.L - news) .
French advertising group Havas (LSE: 0MGT.L - news) , which Vivendi acquired last year, said early on Thursday it
was cooperating with authorities and noted one of its members of staff had been placed under
formal investigation.
(Helen Reid)
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FUTURES UP AS HEAVY EARNINGS DAY KICKS OFF (0614 GMT)
Futures for the main European benchmarks have opened flat to slightly higher as investors'
focus turns to earnings. Looks like the move at the open won't be sufficient to recoup most of
yesterday's losses, however, which took the STOXX 600 to its lowest in a week.
Oil majors are a main focus today: Total just reported a consensus-beating rise in net
profit in the first quarter, helped by record output and high oil prices. Shell (LSE: RDSB.L - news) profits jumped
42 percent in Q1, the highest in over three years.
Here are some further earnings headlines to watch, including Barclays (LSE: BARC.L - news) and Orange (LSE: 0OQV.L - news) :
French oil major Total's Q1 profits lifted by record production
Sandro owner SMCP's Q1 turnover lifted by thriving China, U.S. fashion sales
Telecoms group Orange's Q1 core operating profit grows 3.8 pct on higher sales
Shell profits soar on stronger oil prices
Philips Lighting (Amsterdam: LIGHT.AS - news) 1Q core earnings miss expectations
Swiss National Bank (LSE: 0QKG.L - news) swings to Q1 loss of 6.8 bln Sfr
Barclays reports better than expected first quarter pretax profit of $2.4 bln
ECB MEETING: NO CHANGES EXPECTED BUT SLOWER GROWTH, TRADE WAR IN FOCUS (0557 GMT)
Analysts broadly expect no big news from today's ECB meeting in terms of changes to policy
or communication, but the Euro zone's weaker economic data, and the impact of a potential global
trade war, will be hot topics Draghi will surely be asked to comment on.
"ECB speakers have put on a brave face recently despite the weaker incoming data," write
Societe Generale (Swiss: 519928.SW - news) analysts. The slower data makes it unlikely the ECB's June inflation forecasts
will be much improved from March.
But the main issue remains "how to anchor interest rate expectations," they add. A wildcard
option would be to express a view on the long-term equilibrium interest rate, but this would
come with communication risks.
On trade wars, the ECB should normally look through a tariff-induced rise in inflation, but
SocGen (Paris: FR0000130809 - news) points out "in a scenario of limited resources and resilient economic activity, possibly
with rising oil prices on the back of geopolitical risks, the ECB would be concerned about the
impact on inflation expectations."
SocGen expects a decision in June/July to extend the asset purchase programme until December
at 15 billion euros per month, and rate hikes in June and September 2019, ending the negative
deposit rate.
(Helen Reid)
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RESULTS TO WATCH TODAY (0547 GMT)
Earnings will drive the day in European trading. Roche, the world's biggest cancer
drugs maker, lifted its outlook after first-quarter sales topped analyst estimates.
In less optimistic results, Deutsche Bank announced cuts to bond and equities
trading, overhauling its troubled investment bank after reporting a 79 percent drop in net
profit in Q1.
German forklift maker Kion blamed slower growth for a lower-than-expected order
intake, while network equipment maker Nokia reported a sharp fall in profit as
telecom operators held off spending.
In other news, a judge placed French tycoon Vincent Bollore under formal investigation
yesterday evening over his port network in West Africa. He is suspected of corrupting foreign
public officials and complicity in corruption, his lawyer has said.
Shares (Berlin: DI6.BE - news) in his company Groupe Bollore have fallen 8 percent since the open on
Tuesday, the day police began to question him.
And at 0600 GMT we'll have UK results coming in, with notably oil major Royal Dutch Shell
reporting. After such a run-up in oil stocks recently with crude surging higher, it'll
be interesting to see whether these results deliver, and how the shares react.
Here are some of today's main headlines:
Deutsche Bank announces major overhaul of investment bank
Roche lifts 2018 revenue outlook as new drug sales accelerate
Philips Lighting 1Q core earnings miss expectations
Kion Q1 order intake hit by slower growth, profit rises
Deutsche Boerse (IOB: 0H3T.IL - news) lays out growth plans under new boss
Nokia posts falling first quarter profits
Schindler's Q1 profit rises on strong Asia-Pacific growth
Safran (LSE: 0IU8.L - news) says higher Q1 revenue bolsters full-year targets
France's AccorHotels in talks to buy Movenpick -Le Figaro
Spain's Sabadell Q1 net profit rises 33 pct on lower provisions
Covestro Q1 earnings up on higher prices for foam chemicals
French tycoon Bollore placed under formal investigation in Africa graft probe
(Helen Reid)
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MORNING CALL: EUROPEAN STOCKS TO RECOVER ON EARNINGS BOOST (0527 GMT)
Good morning and welcome to Live Markets. The main European benchmarks are called to open
higher today after a pretty hefty fall yesterday, as anxiety over bond yields dissipates
somewhat to be replaced by a focus on earnings.
Wall Street's robust earnings helped quell concerns over the U.S 10-year yield breaching 3
percent overnight, boosting the Dow and S&P 500 as well as Asian stocks, which bounced back from
three-week lows plumbed in the previous session.
Spreadbetters call the DAX 60 points higher at 12,482, the CAC 40 up 23 points at 5,436, and
the FTSE 100 9 points higher at 7,389.
(Helen Reid)
*****
(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)