Monday 23 October 2017

End of quarter hangs over traders as Euro stocks edge up

EUROPEAN shares opened marginally higher this morning, with trading expected to be subdued as investors avoid making large bets at the end of a volatile quarter and ahead of more US economic data.

Rising markets benefited financials, with asset manager Schroders, up 2.5pc, also aided by an upgrade from Exane BNP Paribas to "outperform".

By 0730 GMT, the FTSEurofirst 300 was up 2.25 points, or 0.2pc, at 1,159.67, with the index on course to suffer its first monthly loss in a year, despite having rallied around 3pc from Monday's lows.

"We are higher on window dressing for the month/quarter/half-year end," said Jawaid Afsar, sales trader at SecurEquity.

He said that having bounced off Monday's year lows, a hold above the 200-day moving average could be enough to see indexes push higher.

He targeted a return to the 6,400 level on Britain's FTSE 100 over the next few sessions after central bankers sought to defuse concerns over slowing support for the global economy.

Soothing words from policymakers have helped calm volatility - a crude gauge of fear among investors - from 10-month highs on Monday.

With central bankers saying any scaling back of stimulus in the United States will depend largely on economic data, the market will focus on Chicago's June index of manufacturing activity at 1345 GMT and Thomson Reuters/University of Michigan's final June consumer sentiment index at 1355 GMT.

Citi increased its exposure to financials and said it was using the recent market pull-back as an opportunity to raise insurers back to "overweight", citing, among other reasons, valuation, improving return on equity, positive earnings momentum and correlation to rising bond yields.

Its top picks are Axa and Aviva.

Telecoms firm Vodafone rose too, up 1pc.

The stock was helped by Deutsche Bank's upgrade to "buy" and reports that John Malone, chairman of Liberty Media, is sounding out options for cable operator Charter Communications to acquire larger rival Time Warner Cable.

Analysts said that if true, it could be good news for Vodafone as it meant it might not be forced to raise its bid further for Kabel Deutschland.

Online Editors

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