European equities struggle after a good day as Citi advises an underweight in the region

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A cafe bar near the Eiffel Tower on the last day before new Covid-19 restrictions force bars and cafes in the capital to close for at least two weeks on October 05, 2020 in Paris, France.

Kiran Ridley / Getty Images

European stocks on Tuesday traded in a narrow range as a major bank said the region was vulnerable to a failed economy as COVID-19 cases remain high.

Up 0.8% on Monday, the Stoxx Europe 600 SXXP,
-0,33%
was slightly lower. The German DAX DAX,
-0,16%,
French CAC 40 PX1,
-0,15%
et UK FTSE 100 UKX,
-0,57%
everyone hugs the flat line.

ES00 US equity futures contracts,
-0,26%
after a 465 point lead for the Dow Jones Industrial Average DJIA,
+ 1,68%
Monday. “US investors appeared to be welcoming President Trump’s return to work, and signs of progress towards further fiscal stimulus also contributed to the index’s gains,” said Ian Williams, strategist at Peel Hunt.

Citigroup strategists, led by Robert Buckland, say they are concerned about “a second wave of COVID-19, more downgrades to BPA, extended valuations and a chaotic election in the United States.” They downgraded their view on continental European stocks to be underweight while keeping UK stocks neutral and US stocks overweight. “The region’s cyclical tilt will make it vulnerable if the economic recovery stalls. A strong euro will also weigh on the performance of companies, ”said strategists on European stocks.

On a per capita basis, Spain, the Czech Republic and France have the highest number of COVID-19 cases in the past 14 days, according to the European Center for Disease Prevention and Control.

Suez SEV,
+ 3,37%
shares rose 5% after Veolia Environnement
LIFE,
+ 0,29%
revealed he had bought a nearly 30% stake in his water and waste management rival which he wanted to buy entirely. Suez said it would act to protect “the interests of its employees, customers and all of its stakeholders, in particular to ensure equal and fair treatment of all its shareholders and to avoid a creeping takeover or control of facto ”.

French electricity company Engie ENGI,
+ 0,86%,
which sold Suez’s stake to Veolia, increased by 2%.

Actions in Puma PUM,
-2,10%
fell 3% after Kering offloaded a nearly 6% stake in the sneaker maker.

WOSG Swiss Watches,
+ 22,63%
jumped 19% as the retailer raised its forecast for annual sales and margin, after better-than-expected sales growth of 18% in the first 10 weeks of its fiscal second quarter.

BHP BHP,
-0,33%
was stable after entering into a $ 505 million deal to buy the HES from Hess,
+ 4,37%
participation in a deep water oil project in the Gulf of Mexico.

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