171120 EU Pre Open

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By :  ,  Financial Analyst

EU indices mixed | TA focus on Imperial Brands

Yesterday, European stocks were broadly higher. The Stoxx Europe 600 rose 1.18%, Germany's DAX added 0.47%, France's CAC 40 jumped 1.70%, and the U.K.'s FTSE 100 was up 1.66%.

76% of STOXX 600 constituents traded higher yesterday.
86% of the shares trade above their 20D MA vs 86% Friday (above the 20D moving average).
85% of the shares trade above their 200D MA vs 82% Friday (above the 20D moving average).

The Euro Stoxx 50 Volatility index eased 0.76pt to 22.38, a new 52w high.

3mths relative high: Insurance, Autos, Banks, Travel & Leisure
3mths relative low: Chemicals, Healthcare

Europe Best 3 sectors
insurance, banks, automobiles & parts

Europe worst 3 sectors
media, personal & household goods, telecommunications

The 10yr Bund yield fell 1bp to -0.55% (above its 20D MA). The 2yr-10yr yield spread rose 0bp to -18bps (above its 20D MA).

EC 14:00: ECB Guindos speech
UK 15:00: BoE Gov Bailey speech
GE 16:45: Bundesbank Balz speech
EC 17:00: ECB President Lagarde speech
UK 18:00: BoE Ramsden speech

In Asian trading hours, EUR/USD held gains at 1.1860 and GBP/USD climbed to 1.3223. USD/JPY slipped to 104.47.

Spot gold edged up to $1,891 an ounce.

Imperial Brands, a tobacco manufacturer, announced that full-year adjusted EPS dropped 6.6% on year to 254.4p and adjusted operating profit fell 5.7% to 3.53 billion pounds on net revenue of 7.99 billion pounds, down 0.1% (+0.8% at constant currency). The company proposed an annual dividend of 137.7p per share, down from 206.6p per share in the prior year. Regarding the outlook, the company said: "We currently expect to deliver low to mid-single digit growth in organic adjusted operating profit at constant currency, (...) A higher tax rate will have a c. 2% impact on earnings with constant currency earnings per share expected to be slightly ahead of the prior year."
From a technical point of view, the stock is trading within an hypothetical double bottom pattern in place since July 2020. A break above the key level at 1428p would validate  the pattern, question the 150-period exponential moving average and call for a new upleg towards 1670p and 1758p.

Source: TradingView, GAIN Capital

Experian, a consumer credit reporting company, reported 1H results: "Performance in the period was resilient, revenue was stable at US$2,487m (2019: US$2,495m) notwithstanding the effects of the COVID-19 pandemic. Operating profit for the six months ended 30 September 2020 was down marginally to US$546m (2019: US$556m). (...) Basic EPS reduced to 36.7 US cents (2019: 39.0 US cents). (...) We have announced a first interim dividend of 14.5 US cents per share, unchanged year-on-year."

BHP Group, a giant metals group, was downgraded to "hold" from "buy" at Societe Generale.

National Grid, an electricity and gas utility company, was downgraded to "neutral" from "buy" at UBS.

BBVA and Sabadell, the two Spanish banks, have confirmed they are in discussions regarding a potential merger.

Sampo, a Finnish financial company, was downgraded to "hold" from "buy" at Deutsche Bank.
Related tags: Commodities Equities Indices

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