Equities mixed as risk appetite is capped by Eurozone backdrop
European equities are a bit of a mixed bag this morning as the market weighs its next step in the face of a weak Eurozone climate. GDP numbers from France confirmed the expected contraction in their economy, with final Q4 2012 numbers due from the UK at 09:30.
With Cypriot banks due to re-open tomorrow for the first time since the saga began and the Easter break to follow, it doesn’t feel like the right environment for pouring on additional risk…
An earnings update from TUI Travel this morning sees the stock trading significantly better after they announced a strong demand for holidays from UK consumers. The outlook for the remainder of 2013 remains positive despite the difficult consumer backdrop, and the board guided towards the top end of growth targets.
Suffering contrasting fortunes are shareholders of brokerage group ICAP, who see their stock offered 7% lower in the face of reduced trade volumes in March and disappointing guidance on full year profitability. Those seeking a silver lining may take some comfort from good progress in their cost cutting programme, and the potential for significant volatility events in the near term that would likely spark another uptick in trade volumes.
Yesterday’s big faller Kazakhmys have bounced this morning, up 4% as Societe Generale stepped in to catch the falling the knife – upgrading the stock to a ‘buy’ and targeting a price of 478 in the medium term.
Business and Consumer Confidence data out of Europe at 10:00 is unlikely to be anything short of horrific, and with no further macro data due, bulls may find themselves reliant on the now-traditional afternoon bounce in the US if we are to see any significant moves higher in today’s session.
Sentiment amongst CMC Markets clients took a negative turn yesterday as we saw afternoon selling – particularly of the Dow. Clients appear to be struggling to reconcile the strong performance of equity markets with the global economic outlook.
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