European bourses set a cautious tone amid festive trading season

European stock markets opened mixed on Wednesday as trading picks up again after the Christmas break, takes a breather from the highs stateside and follows a mixed session in Asia.

The pan-European Stoxx 600 remains unchanged at 0.01 percent. The U.K, in its first day of trade after a four-day break, is trying for gains as the FTSE 100 is up 0.10 percent. Meanwhile, the French CAC 40 and the German DAX are trading fairly flat.

European trade follows the mixed session in Asia but investors will keep an eye to see if stocks in Europe will follow the optimistic tone in Wall Street stocks after the Nasdaq composite setting a closing record on Tuesday.

In Asia, shares were mixed amid low-volume trading, despite a strong growth in China’s industrial profits in November. Shares in Toshiba plunged 11.62 percent to 391.6 yen per share, after it opened untraded due to heavy sale orders. The electronics giant expects to book a one-off loss of about 100 billion yen ($850 million) on a U.S. nuclear power acquisition made by its Westinghouse operation last year, the Nikkei business daily reported. Toshiba said it would hold a board meeting on the issue later on Tuesday.

In commodities, U.S. crude was a touch lower at $53.88 a barrel after an overnight surge of 1.7 percent. The market is taking a wait-and-see approach on the official start of the landmark deal reached by members and several non-members of oil cartel OPEC to reduce their output. The deal is set to kick in from Jan 1.

 

Basic resources outperform

Basic resources leads the Stoxx 600 sectors, up more than 2 percent. Shares in mining giant BHP Billiton and Anglo American are up more than 4 percent.

Banking is another sector that investors are keeping a close eye on as analysts remain worried about the state of the European banking system. The Stoxx Europe 600 banking index is fairly flat this morning but shares in big banks such as Deutsche Bank and Credit Suisse tried to hold gains.

In London, shares in Bovis Homes were down nearly 5 percent on the open after a profit warning and a downgrade of its 2016 estimate for home sales, citing slower-than-expected build production across the group’s sites in December.

Investors are going to keep their focus on Banca Monte dei Paschi di Siena after the European Central Bank told the troubled Italian lender that it needs to plug an 8.8 billion euro ($9.2 billion) capital shortfall. Shares in the lender have not yet opened for trade.

In other news, Volkswagen has acquired Canadian parking payment app PayByPhone for an undisclosed sum. The Vancouver-based app was founded in 2000 and claims to have processed 300 million dollars in annual transactions. This comes after VW launched a 50-person division in Berlin to invest in mobility services earlier this year. Shares in Volkswagen are trading slightly higher.

Meanwhile, drugmaker Sanofi has sued Novo Nordisk in the United States. The French drugmaker has accused its Danish rival of falsely claiming that Sanofi’s insulin treatment would no longer be available to U.S. customers, paving the way for extra business for Novo’s competitor drug. Sanofi’s complaint seeks an order that would force Novo Nordisk to withdraw marketing materials for its Tresiba drug and pay an undisclosed amount in damages.

Source: CNBC

 

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