Jan 23 ,2025
Synopsis:
European equity markets ended mostly higher Thursday with the Stoxx 600, FTSE 100 and DAX at or near fresh record highs. Netherlands AEX bucked the trend, closing down (0.6%) amid tech sector weakness.
Focus remains on Trump policies and latest remarks from his virtual appearance at the World Economic Forum in Davos; Trump cited saying he plans to ask OPEC to lower oil prices (WTI fell to session lows following the remarks). He was also cited saying EU tariffs make it very difficult to bring products Into Europe, and will do something about the trade deficit with the EU. Also argued the EU shouldn't be going after US companies.
In Europe, Norges Bank left key rate on hold at 4.5% in today's interim meeting and signalled likely rate cut in March, as expected. French business confidence survey showed stabilization in sentiment. UK CBI industrial trends survey remains weak, yet up from prior reading. Elsewhere, a BRC survey showed nearly half of Britons expect UK economy to worsen like other weaker consumer confidence updates.
Diverse performance among European super sectors. Banks top gainer led by Nordic banks after Swedbank SWED.A.SS) reported Q4 earnings ahead of expectations with strong NII and raised FY24 dividend corresponding to a payout ratio of 70% for the year. Spain's Bankinter (BJT.SM) reported Q4 net income €222M vs StreetAccount €218.1M. Technology the main EU sector laggard ahead of big tech results next wee; today saw some read-across from SK Hynix suggesting 2025 memory demand outlook clouded by inventory adjustments from PC and smartphone OEMs, as well as strengthened protective trade policies and geopolitical risks. Analysts noted while AI demand continues to be very strong, other segments (PC/smartphone) are slow to recover. UK homebuilders supported by stabilisation of short-term UK interest rates, positive UBS note, infrastructure regulation changes. In the Industrials sector, Sandvik (SAND.SS) saw its shares rise following solid Q4 results and optimistic conference call. Spectris (SXS.LN) another notable gainer following its FY trading update: expects FY adjusted operating profit to be above consensus and at the upper end of the range of analyst expectations.
Among other European stocks in focus, Puma (PUM.GR) shares slid ~ (22%) after releasing disappointing preliminary Q4/FY. Puma management announced the "nextlevel" cost efficiency programme with an EBIT margin objective of 8.5% pushed to 2027 with the aim of optimizing costs and improving operations. In M&A, Salzgitter (SZG.GR) shareholder GP Günter Papenburg Aktiengesellschaft and TSR Recycling submitted non-binding offer to takeover the company with indictive offer at €18.50/share.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Banks +1.83%, Real Estate +1.04%, Ind Goods & Svcs +0.88%, Consumer Products and Services +0.86%, Financial Svcs +0.72%, Construct & Mtls +0.66%, Energy+0.54%, Food, Beverage and Tobacco +0.48%,
Underperformers:
Technology (1.48%), Media (0.58%), Autos & Parts (0.47%), Basic Resources (0.23%), Personal Care Drug and Grocery Stores (0.15%), Retail (0.13%), Chemicals +0.16%, Travel & Leisure +0.23%, Telecom +0.27%, Utilities +0.27%, Health Care +0.30%
Macro:
Trump
EU
EU to Bet on AI, Advanced Research and Clean Tech in Bid to Compete -- Bloomberg
UK
Company news:
Notable Gainers
+28.3% WJG.LN (Watkin Jones £0.25, +0.06) -- FY earnings; Peel Hunt upgrade
+20.5% FORSE.FP (Forsee Power €0.74, +0.13) -- Q4 revenue; initiated buy at TPICAP Midcap
+18.2% ELK.NO (Elkem NOK19.60, +3.02) -- initiates strategic review of its Silicones division
+14.9% MAB1.LN (Mortgage Advice Bureau £7.24, +0.94) -- trading update
+13.7% AT.LN (Ashtead Technology Holdings £6.32, +0.76) -- trading update
+13.3% LUCE.LN (Luceco £1.42, +0.17) -- trading update
+10.5% SXS.LN (Spectris £29.84, +2.84) -- trading update
+10.0% TM17.LN (Team17 Group £2.64, +0.24) -- trading update; changes name to Everplay Group plc and TIDM to EVPL
+8.9% EQT.SS (EQT AB SEK377.50, +30.90) -- FY earnings
+8.8% SAND.SS (Sandvik SEK230.10, +18.60) -- Q4 earnings
+7.3% AFX.GR (Carl Zeiss Meditec €53.10, +3.60) -- Equita upgrade
+6.8% IQE.LN (IQE £0.13, +0.01) -- trading update
+6.3% WITH.FH (WithSecure €0.84, +0.05) -- sells its Cyber security consulting business for a total E.V. of €22.5M to Neqst
+5.8% FNX.LN (Fonix Plc £2.18, +0.12) -- trading update
+5.7% SZG.GR (Salzgitter €16.63, +0.90) -- shareholder GP Günter Papenburg Aktiengesellschaft and TSR Recycling submit non-binding offer to takeover the company with indictive offer at €18.50/share
+5.1% ZTF.LN (Zotefoams £3.10, +0.15) -- trading update
+4.8% APN.LN (Applied Nutrition £1.54, +0.07) -- initiated buy at Goodbody Stockbrokers
+4.7% AA4.LN (Amedeo Air Four Plus £0.61, +0.03) -- Jefferies downgrade
+4.2% SWED.A.SS (Swedbank SEK246.70, +9.90) -- Q4 earnings
+3.5% NET.LN (Netcall £1.03, +0.03) -- trading update
+3.5% VCT.FP (Vicat €40.25, +1.35) -- Barclays upgrade
+2.3% IRLAB.A.SS (IRLAB Therapeutics SEK15.70, +0.35) -- EMA waiver for pediatric studies with mesdopetam in Parkinson's Disease
+1.4% ROR.LN (Rotork £3.39, +0.05) -- initiated buy at Kepler Cheuvreux
+1.1% FGP.LN (FirstGroup £1.64, +0.02) -- HSBC upgrade
+1.0% HUBN.SW (HUBER+SUHNER CHF79.30, +0.80) -- FY sales
Notable Decliners
-25.5% ENW.LN (Enwell Energy £0.18, -0.06) -- Q4 operations update
-23.1% REVB.LN (Revolution Beauty Group £0.11, -0.03) -- trading update; profit warning
-22.8% PUM.GR (Puma €32.31, -9.55) -- prelim FY earnings; "nextlevel" efficiency program; Metzler Capital Markets downgrade
-16.8% CMCX.LN (CMC Markets £2.21, -0.45) -- trading update
-13.3% INCH.LN (Inchcape £6.52, -1.00) -- JPMorgan downgrade
-7.7% AGL.LN (ANGLE £0.12, -0.01) -- trading update
-7.2% PBEE.LN (PensionBee Group £1.61, -0.13) -- trading update
-7.0% THG.LN (THG Plc £0.37, -0.03) -- trading update
-6.9% TRYG.DC (Tryg DKK147.40, -11.00) -- Q4 earnings
-6.7% ESSITY.B.SS (Essity SEK278.80, -20.10) -- Q4 earnings; CEO to step down
-6.2% IGG.LN (IG Group Holdings £10.06, -0.67) -- H1 earnings
-5.8% ITH.LN (Ithaca Energy £1.27, -0.08) -- Goldman Sachs downgrade
-4.8% HBR.LN (Harbour Energy £2.75, -0.14) -- trading update
-4.6% ZOO.LN (Zoo Digital Group £0.31, -0.02) -- CFO resigns
-4.4% PROX.BB (Proximus €4.83, -0.22) -- Oddo downgrade
-4.1% PHAR.LN (Pharos Energy £0.25, -0.01) -- trading update
-3.2% BOKU.LN (BOKU £1.84, -0.06) -- trading update
-3.0% ABF.LN (Associated British Foods £18.80, -0.57) -- trading update
-1.7% PFC.LN (Petrofac £0.08, -0.00) -- provides update on financial restructuring: Company continues to make good progress with the inter-conditional terms of the transaction
-1.6% TRE.SM (Tecnicas Reunidas €13.55, -0.22) -- BNP Paribas Exane downgrade
-1.6% SBRY.LN (J Sainsbury £2.53, -0.04) -- accelerates Next Level strategy; says fresh food expansion, management overhaul and over 3,000 job cuts projected
-0.8% ENOG.LN (Energean £10.15, -0.08) -- trading update
-0.8% EVO.SS (Evolution SEK832.40, -7.00) -- Deutsche Bank downgrade
-0.7% GLPG.NA (Galapagos €22.78, -0.16) -- Barclays downgrade
-0.5% INVE.B.SS (Investor SEK314.80, -1.50) -- FY earnings
EU companies reporting tomorrow:
Earnings:
Benelux: Signify (LIGHT.NA)
DACHs: Givaudan (GIVN.SW), Emmi (EMMN.SW), SFS (SFSN.SW)
Nordics: Ericsson (ERIC.B.SS), Alleima (ALLEI.SS), Investment AB Oresund (ORES.SS), Gjensidige Forsikring (GJF.NO)
UK: TheWorks.co.uk (WRKS.LN), Paragon Banking Group (PAG.LN), Severn Trent (SVT.LN)
Trading Update: Burberry Group (BRBY.LN)
Data:
Economics:
France Jan Business Survey 95 vs consensus 96 and prior 97
Markets:
WTI Crude (Mar 25): ($0.66) or (0.87%) to $74.78
€-$ (0.0007) or (0.07%) to 1.0405
£-$ +0.0018 or +0.15% to 1.2334
€-£ (0.0017) to 0.8437
S&P 500 +0.13%
Performance year-to-date
FTSE 100: +4.80%
DAX: +7.55%
CAC: +6.94%
MIB: +5.64%
Stoxx 600: +4.48%
This information and data is provided for general informational purposes only. The Bank of New York Mellon and our information suppliers do not warrant or guarantee the accuracy, timeliness or completeness of this information or data. We provide no advice nor recommendation or endorsement with respect to any company or securities. We do not undertake any obligation to update or amend this information or data. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities.
Please refer to "Terms Of Use".
DEPOSITARY RECEIPTS:
NOT FDIC, STATE OR FEDERAL AGENCY INSURED
MAY LOSE VALUE
NO BANK, STATE OR FEDERAL AGENCY GUARANTEE