EUROPE EYES STEADY START (0735 GMT) European shares are set to kick off the first trading session of March on a stable footing, as positive China data offsets worries over sticky inflation that is bolstering the case for another big rate hike from the European Central Bank later this month. Just as M&A in the region showed timid signs of picking up, Euronext withdrew its 5.5 billion-euro offer for fund distribution firm Allfunds , which called the terms of the exchange operator's bid inadequate. Allfunds shares were seen falling 10% at the cash market open. BNP Paribas was also set to fall on news that Belgium was preparing the sale of a third of its 7.8% equity stake the euro-zone's biggest bank. A flurry of earnings are on the radar too. Nivea maker Beiersdorf forecast organic sales growth to slow after a bumper 2022, while logistics group Kuehne und Nagel reported a 43% drop in Q4 operating profit and said geopolitical and inflationary challenges will persist. Just Eat Takeaway.com swung to a small 2022 core profit. Oilfield services company Saipem could get a boost after a $400 million contract in Africa. EDP Renovaveis is also on the watchlist after sources said the company has been sounding out investors to take a stake to help finance its push for green growth.
Euro STOXX 50 futures and FTSE 100 contracts were last up 0.2 and 0.3% respectively.
(Danilo Masoni)
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BRISK CHINA ACTIVITY SETS THE MOOD (0654 GMT) After a tentative start to the month, markets in Asia got a jolt from China's manufacturing activity which expanded at the fastest pace in more than a decade in February, and the exuberant mood is likely to seep through to European markets. The MSCI Asia ex-Japan index was pinned near two-month lows at the start of the day before spiking up 1.4%, and was on track for its best day in nearly two months after China's manufacturing purchasing managers' index for February surged to 52.6, up from 50.1 in January.
The data from China was an exception for the region, where factory activity otherwise stalled in February, but investors bet on recovery in the world's second biggest economy at a time when the U.S. Federal Reserve is likely to stay hawkish for longer. Meanwhile, Australia's economy grew at its weakest pace in a year last quarter, as strength in trade was offset by rising interest rates and high inflation. Data from France and Spain on Monday highlighted the sticky nature of inflation, weighing on the continent-wide STOXX 600 index. The index was one of the few to eke out meagre gains for the month of February. And after a euphoric January, traders might wonder what comes next. March madness, perhaps? March also brings us the next set of central bank meetings, with investors expecting the ECB to hike interest rates by 50 basis points, taking the benchmark rate to 3%. The central bank is due to meet on March 16. But before that, investors will parse through a raft of economic data, including S&P global manufacturing PMIs for the Eurozone, Germany and France later in the day.
Key developments that could influence markets on Wednesday: Economic events: UK house prices, S&P Global manufacturing PMI for Spain, France, Germany and Eurozone
Speakers: BOE's Andrew Bailey, Italian central bank governor Ignazio Visco
(Ankur Banerjee)
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