Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Unicredit Leads Bank Shares Lower; Manufacturing Slows

By CMC Markets (Jasper Lawler)Market OverviewAug 02, 2016 05:10
uk.investing.com/analysis/unicredit-leads-bank-shares-lower.-manufacturing-slows-200145524
Unicredit Leads Bank Shares Lower; Manufacturing Slows
By CMC Markets (Jasper Lawler)   |  Aug 02, 2016 05:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

UK and Europe

Bank and oil company shares led European markets lower on Monday after stress test results did little to revive confidence in the banking sector and the price of crude slid following another weekly rise in the number of US oil rigs. Disappointing UK and European PMI manufacturing data was another weight on sentiment.

The FTSE 100 slipped back beneath 6700 as gains in the basic resource sector were unable to offset weakness in bank, oil and homebuilder shares.

Banking shares across Europe had opened higher, led by Italy’s Monte dei Paschi (LON:0R7P) following an agreement on Friday for a private €5bn rescue deal. But it was another Italian bank that led to the sector’s gains coming unstuck. Shares of Unicredit (LON:0Q54) were temporarily suspended from trading after going limit down. With a below-average result in the stress test and as Italy’s most systematically-important bank, UniCredit felt the sharp end of investor mistrust.

Shares of Heineken (LON:0O26) dipped over 3% after a rise in first-half profits and revenues came short of analyst expectations. Heineken’s global diversity is helping it whether various economic storms around the world with a focus on regions that are growing. Gains in the likes of Vietnam and Mexico have outstripped declines in Africa and Eastern Europe including Russia. The generally strong first half performance reduces the need for Heineken to merge with a rival such as Carlsberg (CO:CARLa) or Diageo (LON:DGE) to fend off mega-brew competitor Anheuser-Busch Inbev SA (LON:0O1Z) / SAB Miller (LON:SAB), should the deal eventually happen.

Shares of BA-owner IAG (LON:ICAG) fell nearly 3% after it emerged Qatar Airways has upped its stake to over 20%

US

US stocks drifted lower on Monday as a slowdown in manufacturing at home and abroad saw traders hold off from adding to positions in the market. A merger of Elon Musk’s Tesla (NASDAQ:TSLA) and Solar City (NASDAQ:SCTY) helped edge the NASDAQ 100 into positive territory after a string of well-received tech earnings.

Shares of online crafts retailer Etsy (NASDAQ:ETSY) gained double digits after Citigroup (NYSE:C) initiated coverage of the stock with a “buy” rating, saying it sees good potential for margin expansion.

FX

The US dollar was higher against most major currencies on Monday as the Fed’s Kaplan suggested a September rate hike was “firmly on the table” whilst a more cautious Bill Dudley said he “wouldn’t rule out” further tightening this year. Data showed slowing manufacturing activity in July so the worry is that the sub-par 1.2% y/y GDP growth from Q2 is extending into Q3. The argument for a rate hike in September all but disappears if employment gains are not accompanied by rising economic growth.

The British pound fell on Monday after data showed UK manufacturing activity in July slumped to its lowest level since February 2013. The drop in sterling has helped boost export orders but this was more than offset by a weaker production and domestic orders. The reading of 48.2 was worse than the flash estimate of 49.1. It appears post-Brexit fears amongst manufactures were not just a flash in the pan.

Commodities

The price of oil gave up early gains to trade lower on Monday as rekindled fears the supply glut would be slower to unwind. On Friday Brent and WTI contracts rebounded off technical support from the 200 day moving average. Lacklustre Chinese economic data points to demand oil that isn’t growing fast enough to offset expanding OPEC production. Officials from Iraq said oil exports from Iraq’s southern ports rose to an average of 3.2m bpd in June, up from 3.175m in June.

Gold prices were subdued on Monday, pulling back modestly from large gains the previous week despite weaker than expected US manufacturing data. Data showing the US economy growing at half the pace expected has dented chances of a September rate hike and weighed on the US dollar.

DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Original post

Unicredit Leads Bank Shares Lower; Manufacturing Slows
 

Related Articles

Unicredit Leads Bank Shares Lower; Manufacturing Slows

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The inherent concept of such investments means that they are not suitable for the investor seeking income from such investments, and are only suitable for those who have the required experience and understand the market risks. You should carefully consider your investment objectives, level of experience, and seek advice from an independent financial advisor if you have any doubts.
Continue with Google
or
Sign up with Email