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UK Autumn Statement positive for telecoms and utilities - GS

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STOXX 600 down 0.1%

Energy top drag

S&P futures edge lower

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The changes announced in last week's Autumn Statement from Britain's finance minister are positive for the capex-heavy utilities and telecoms sectors, according to Goldman Sachs.

Jeremy Hunt announced a raft of measures aimed at reviving the UK's sluggish economy on Wednesday. Among others, they included making the full expensing capital allowance permanent and reducing national insurance contributions.

Based on the changes, GS economists estimate the drag from fiscal policy will moderate by 0.1pp in 2024 and have revised up their 2024 real GDP growth forecast to 0.7% from 0.6%.

"Companies investing heavily in the next few years (and beyond) are the ones most likely to gain from this. UK capex to sales remains low versus other countries, so the government’s focus on this should help remediate low growth," writes GS.

Telecoms, utilities and travel and leisure are the sectors which are investing the most, they say, and the first two stand out.

"Our analysts see the statement as overall a positive for utilities and telecoms," they say, adding that changes on the electricity generator levy and seabed licenses are a positive for the offshore industry.

GS think measures on networks should help the delivery of sizeable infrastructure plans at SSE and National Grid, while at BT Group they argue the measures will boost ‘true’ (free cash flow) by 9%-12% in 2028-30E.

They also see it "as further evidence of authorities understanding the need to incentivise digital infrastructure investment with higher returns."

(Lucy Raitano)



European stocks have added 7% in the last month, but UBS's equity strategy team still sees a slowdown and equity weakness on the horizon, as well as three key drivers of differentiation of stock performance in 2024.

The first potential divergence is on the sales front.

"Backlogs of work are weak across European industrial sectors. We don't think a new upswing is imminent without policy support and so favour consumer sectors that show more resilience," write the UBS equity strategists in a note.

Consumer staples and discretionary are more favoured, while capital goods appear vulnerable in this area, they say.

The second driver is margins.

"COVID supply disruption supported record margins but the demand slowdown should see a normalisation. Competitive sectors with high-wage or energy costs may be most impacted. Autos and airlines fit the bill."

Lastly, valuation divergence between higher quality and lower quality companies will be an important driver of stock performance.

"Lower bond yields will support valuations for quality companies, but wider credit spreads/risk premia mean low quality may remain under pressure into earnings weakness."

They expect modestly higher volatility and this usually would impact cyclical sector valuations more than defensive sectors.

"However, some of the most high beta/cyclical sectors are already very cheap and unlikely to derate further in our view," they said.

(Lucy Raitano)



There was little action at the open across European equities on Monday following the festive end of the week in the US after Thanksgiving. Sectoral gauges moved within tight ranges, volatility .V2TX inched up from low levels, and the STOXX 600 .STOXX hovered around parity.

The region wide index was last down 0.08%. Energy .SXEP was the biggest faller, as crude prices slipped towards $80 a barrel ahead of an OPEC+ meeting this week for an agreement to curb supplies. Shell SHEL.L was the top drag on the STOXX.

Sanofi SASY.PA was the top positive weight, up as much as 2.6% after the 110-billion-euro drugmaker said it would seek US approval for it best-selling anti-inflammatory drug Dupixent to be used in the treatment of "smoker's lung".

Here is your opening snapshot:

(Danilo Masoni)



European shares were set to start the week slightly lower, tracking weakness in U.S. futures, as investors seek fresh direction following a November in which the STOXX 600 .STOXX has risen over 6%, the most in a month since January.

EuroSTOXX50 STXEc1 and FTSE FFIc1 futures were down around 0.2% and S&P 500 contracts ESv1 slid 0.3%. In Asia, shares slipped ahead of potentially market-moving inflation data from the United States and Europe later in the week.

ECB President Lagarde is due to speak at the European Parliament's Economic and Monetary Affairs Committee later in the day. Investors will also keep an eye on the ongoing budget saga in Germany following a constitutional court ruling this month that threw Berlin's financial plans into disarray.

Holiday shopping in the consumer-driven U.S. economy was another focus. Brokerage TD Cowen lowered its U.S. holiday spending estimate to 2-3% growth, from 4-5%, as it forecast flat Black Friday traffic. On Cyber Monday, Salesforce expects to see discounts averaging 30%.

Corporate news in Europe was thinning out, as the reporting season nears an end. Analysts expect Q3 earnings to have fallen 11.4% on sales down 7.7%, LSEG IBES data show. Excluding energy, earnings are pointing up 0.5% on sales down 4%.

Britain's biggest high street bank Lloyds LLOY.L is putting around 2,500 jobs at risk as part of a shake-up, a source familiar with the matter told Reuters, amid a renewed push by lenders to slash costs.

In Germany, Uniper UN01.DE said it had to pay 550 million euros to a European supplier of liquefied natural gas, citing an arbitration court ruling over a contract concluded prior to the group's spin-off in 2016.

(Danilo Masoni)



Asia started Monday in hesitant fashion and has turned steadily grimmer, although there is no obvious catalyst for the risk-off mood. Most regional share markets are modestly lower, as are Wall Street and European futures.

Treasury yields are a few basis points higher, but that hasn't helped the dollar which lost ground to a broadly firmer yen. Oil prices have slipped further, while gold XAU= hit a six-month high above $2,017 an ounce - although no fundamental factors were evident behind the move.

China's central bank announced it would encourage financial institutions to support private companies, including with a greater tolerance for non-performing loans. The market didn't seem impressed and China's blue chips .CSI300 are down around 1.2%.

There has been a build-up of reports about official steps to support the property sector, including white-listing companies for loans, yet it's still mostly talk rather than action.

The official China PMI for November is due on Thursday and analysts generally look for a small pick-up and maybe a reading above 50.0.

The approach of the month's end could also generate some caution given the hefty gains investors are sitting on. Japan's Nikkei .N225 is up more than 8% so far in November, as is the S&P 500 - and that would be its best performance since mid-2022.

About 55% of the S&P 500's component shares are trading above their 200-day moving averages, the highest share in nearly two months, according to LPL Financial.

The oil market faces a tense few days ahead of a meeting of OPEC+ on Nov. 30, which was postponed from Sunday as producers struggled to forge a unanimous position. O/R

OPEC+ sources have said that African oil producers are seeking higher caps for 2024, while media reports suggest that Saudi Arabia may extend its additional 1 million bpd voluntary production cut which is due to expire at the end of December.

Brent was down another 0.8% today, and 8.6% for the month so far, which if sustained would be a boon both for the battle against inflation and for consumer spending power.

The Federal Reserve's favoured measure of inflation - personal consumption expenditures - is due on Thursday and forecast to dip back to 3.1%, in part due to falling gas prices. The core is seen easing to 3.5%, its lowest since mid-2021.

Data on EU inflation is also due Thursday, along with measures for Germany and Spain. Core EU inflation is forecast at 3.9%, the lowest since the middle of last year.

If realised, this will support market wagers of no more rate hikes, and policy easing in 2024. Futures imply around 80 basis points of cuts for both the Fed and the ECB, starting in June. FEDWATCH0#ECBWATCH

Fed Chair Jerome Powell will have a chance to push back against the doves at a Fireside Chat on Friday, and there are at least seven other Fed speakers on the docket this week.

European Central Bank President Christine Lagarde has also sounded in no hurry to ease and will have another opportunity to drive home the message at the EU parliament later on Monday.

Key developments that could influence markets on Monday:

- ECB President Christine Lagarde at ECON Hearing before the Committee on Economic and Monetary Affairs of the European Parliament

- UK CBI distributive trades for Nov

- U.S. new home sales, building permits for Oct

(Wayne Cole)



دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔

ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔

کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔

خطرے کی انتباہ: آپکا سرمایہ خطرے پر ہے۔ ہو سکتا ہے کہ لیورج پروڈکٹ سب کیلیے موزوں نہ ہوں۔ براہ کرم ہمارے مکمل رسک ڈسکلوژر کو پڑھیے۔