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By :  ,  Financial Analyst

EU indices mixed | TA focus on Avast

Yesterday, European stocks were broadly higher. The Stoxx Europe 600 Index jumped 1.68%, Germany's DAX 30 surged 2.04%, France's CAC 40 climbed 2.41% and the U.K.'s FTSE 100 was up 1.71%.

85% of STOXX 600 constituents traded higher yesterday.
71% of the shares trade above their 20D MA vs 54% Monday (below the 20D moving average).
55% of the shares trade above their 200D MA vs 50% Monday (above the 20D moving average).

The Euro Stoxx 50 Volatility index eased 0.73pt to 23.39, a new 52w high.

3mths relative high: Autos, Construction, Industrial
3mths relative low: Pers. & House. Goods, Food & Beverage, Healthcare

Europe Best 3 sectors
travel & leisure, automobiles & parts, banks

Europe worst 3 sectors
real estate, utilities, health care

The 10yr Bund yield fell 2bps to -0.53% (below its 20D MA). The 2yr-10yr yield spread fell 3bps to -20bps (below its 20D MA).

UK 07:00: Q2 Labour Productivity QoQ Prel, exp.: -1.3%
UK 07:00: Q2 Construction Orders YoY, exp.: 4%
UK 07:00: Jun GDP 3-Mth Avg, exp.: -19.1%
UK 07:00: Jun GDP MoM, exp.: 1.8%
UK 07:00: Jun Construction Output YoY, exp.: -39.7%
UK 07:00: Jun Industrial Production MoM, exp.: 6%
UK 07:00: Jun Industrial Production YoY, exp.: -20%
UK 07:00: Jun Manufacturing Production YoY, exp.: -22.8%
UK 07:00: Jun Manufacturing Production MoM, exp.: 8.4%
UK 07:00: Jun Balance of Trade, exp.: £4.3B
UK 07:00: Q2 Business Investment QoQ Prel, exp.: -0.3%
UK 07:00: Q2 Business Investment YoY Prel, exp.: 0.8%
UK 07:00: Q2 GDP Growth Rate YoY Prel, exp.: -1.7%
UK 07:00: Q2 GDP Growth Rate QoQ Prel, exp.: -2.2%
UK 07:00: Jun GDP YoY, exp.: -24%
UK 07:00: Jun Goods Trade Balance, exp.: £-2.81B
EC 10:00: Jun Industrial Production YoY, exp.: -20.9%
EC 10:00: Jun Industrial Production MoM, exp.: 12.4%
GE 10:40: 10-Year Bund auction, exp.: -0.46%
UK 14:00: Jul NIESR Monthly GDP Tracker, exp.: -21.2%

In Asian trading hours, EUR/USD fell to 1.1718 and GBP/USD slid to 1.3024. USD/JPY advanced further to 106.75. NZD/USD declined to 0.6557. Earlier today, the Reserve Bank of New Zealand kept its benchmark rate unchanged at 0.25% as expected, while expanding the Large Scale Asset Purchase programme up to 100 billion New Zealand dollars from 60 billion New Zealand dollars previously. RBNZ said any future move to a lower or negative official cash rate could provide an effective way to deliver additional monetary stimulus if needed.

Spot gold accelerated to the downside, marking a day-low near $1.873 an ounce.

Spirax-Sarco Engineering, an engineering group, announced 1H results: "Sales declined less than 4% in the first half of the year to £569.7 million (2019: £591.2 million). (...) The Group adjusted profit before taxation reduced by 8% to £114.5 million (2019: £124.6 million). (...) Adjusted basic earnings per share fell by 7% to 111.6 pence (2019: 120.0 pence). (...) The Board has declared an interim dividend of 33.5 pence (2019: 32.0 pence) per ordinary share, an increase of 5%."

Avast, a cybersecurity provider, posted 1H results: "The Group's Adjusted Revenue increased by $6.4m to $433.1m in the half year ended 30 June 2020, which represents a 1.5% increase at actual rates and organic growth of 6.6%. (...) Adjusted EBITDA increased 2.1% to $241.4m, 1.5% excluding FX, resulting in Adjusted EBITDA margin of 55.7%. This is in line with full year guidance of broadly flat (55.4% EBITDA margin in H1 2019). (...) The reported Operating Profit decreased by $(27.4)m to $134.5m. (...) Adjusted fully diluted earnings per share (EPS) up 11.8% to $0.16 (versus $0.15 at HY 2019)."
From a daily point of view, the share is supported by a rising trend line drawn since March. Furthermore, the stock is trading above its rising 50 DMA and the former 550 top - early 2020 - is now an overlap area. Above 541.5p look for a new all-time high at 658.5p and 715.5p in extension.

Source: GAIN Capital, TradingView

Admiral Group, a financial services company, posted 1H results: "Group turnover reduced by 4% to £1.69 billion (H1 2019: £1.76 billion). (...) Group share of pre-tax profits of £286.7 million (H1 2019: £220.2 million) and statutory profit before tax of £286.1 million (H1 2019: £218.2 million), growing by 30% and 31% respectively. (...) Earnings per share is 32% higher than in H1 2019 at 82.9 pence (H1 2019: 63.0 pence). (...) The Board has declared an interim dividend of 70.5 pence, made up of a normal dividend of 55.0 pence per share and a special dividend of 15.5 pence per share, 12% higher than the 2019 interim dividend of 63.0 pence per share."

E.ON, an electric utility company, announced 1H adjusted net income grew 5% on year to 933 million euros and adjusted EBIT rose 26% to 2.16 billion euros on revenue of 30.50 billion euros, up 90%. The company said: "Taking into account the effects of the COVID-19 pandemic that are already foreseeable today, E.ON expects the Group's adjusted EBIT for the 2020 financial year to be between E3.6 and E3.8 billion and its adjusted net income to be between E1.5 and E1.7 billion. Previously E.ON had announced forecast ranges of E3.9 to E4.1 billion for adjusted EBIT and E1.7 to E1.9 billion for adjusted net income."

ABN AMRO, a Dutch bank, said it swung to a 2Q net loss of 5 million euros from a net profit of 693 million euros in the prior-year period, as impairment charges on financial instruments surged to 703 million euros from 129 million euros, and operating income dropped 15% on year to 1.99 billion euros. Also, fully-loaded CET1 ratio fell to 17.3% from 18.0% and return on average equity was -0.7%, compared with 13.6% the same period last year. Meanwhile, the bank said it "will exit all non-European corporate banking activities".

Just Eat Takeaway.com, an online food delivery services provider, reported that 1H net loss widened to 59 million euros from 33 million euros in the prior-year period while operating loss narrowed to 11 million euros from 21 million euros. Also revenue was up 276% on year to 675 million euros.

Novozymes, a Danish biotechnology company, announced that 2Q net income declined 28% on year to 646 million Danish krone and EBIT slid 27% to 867 million Danish krone on revenue of 3.35 billion Danish krone, down 3% (-2 organic growth). The company confirmed its full-year organic revenue growth forecast of -2% to +2%.
Related tags: Commodities Forex Equities

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