EU Morning Session: Green start for Europe

Market Overview & Key Updates:

European indices are rising shortly after the open, except for the FTSE 100, as stronger-than-expected GDP data for Q4 2024 reduces expectations for potential rate cuts from the Bank of England (BoE). European energy stocks may see significant activity as oil continues to decline, with President Donald Trump of the U.S. and President Vladimir Putin of Russia agreeing to initiate peace talks to end the war in Ukraine. This sparks speculation that the risks to Russian energy supplies may decrease. Iron ore is trading with minimal declines after reaching its highest level since October, while traders monitor the impact of a cyclone that led to the closure of ports in Australia.

Analyst Insights (JPMorgan): JPMorgan analysts, led by Davide Silvestrini, suggest that the STOXX 600 Automobiles & Parts Index (SXAP) could be at risk of a short squeeze. This is because the sector has significantly lagged behind the EURO STOXX Banks Index (SX7E), and many companies in the sector have yet to report earnings. SXAP and SX7E are highly correlated with a high beta, and negative news from the automotive sector has caused a divergence in their performances.

Dividends from European Banks: For 2025, dividend payouts in European banks are likely to remain supported by earnings growth. Societe Generale and Credit Agricole may follow BNP Paribas in moving to semi-annual dividend distributions.

Family Holding Delfin’s Move: The Del Vecchio family holding, Delfin, is set to increase its stake in Italian insurer Generali to 20% once all necessary approvals are received. This was revealed by Delfin’s chairman Francesco Milleri in an interview with Il Sole 24 Ore.

European M&A Watch:

Deal News:

• CBK GY: Commerzbank promises to increase profits in the fight against UniCredit.
• EQT SS: Bain, Advent, and EQT among bidders for Trend Micro, according to Reuters.
• ACP PW: Asseco shares reached their highest level since 2000 following investment by Topicus.
• G IM/MB IM/BMPS IM/UCG IM: Delfin chairman confirms readiness to increase stake in Generali to 20%, as reported by Sole.
• Qatar Sovereign Fund: Supports London-based venture capital firm Utopia.
• Honda & Nissan: Officially end merger talks.
• RNO FP: Renault says Honda’s conditions for Nissan were “unacceptable.”

IPO/Offerings/Buybacks/Equity News:

• PRU LN: Prudential hires Citigroup for a potential $1bn IPO in India.
• HBX SM: Spanish IPO of HBX is almost five times oversubscribed.
• FERGR NA: Ferrari Group’s IPO priced at €8.60/share.
• Novo Banco: Lone Star-backed Novo Banco looks to banks for an IPO in Portugal.
• BAS GR: BASF seeks banks to submit proposals for listing its agrochemical division.
• DSFIR NA: DSM-Firmenich reports Q4 adjusted EBITDA above expectations.
• WIE AV: Wienerberger plans to buy back 1%-2% of its capital annually.
• HTG GY: HomeToGo offers 53.1 million shares at €1.60/share.
• ARGEO NO: Argeo’s public offering has been priced.

Corporate Events:

• AGMs: Siemens, easyJet
• Dividend Payments: Equinor, Shell
• Earnings/Updates: BCV, Orkla, DSM-Firmenich, KBC, Siemens, Nestlé, Embracer, Swisscom, Unibail, Barclays, Valmet, Coca-Cola HBC, Unilever, Commerzbank, Legrand, Arcadis, TF1, Renishaw, Orange, Thyssenkrupp, Fortnox, Neste, Ipsen, Metso, RELX, Moncler, Akastor, British American Tobacco, Adyen, Lagardère, Euronext, Gecina, Recordati
• Capital Markets Day: Neste, Commerzbank
• Conferences/Corporate Access: Nokia, Roche, Siemens Healthineers, Infineon

This sets a dynamic stage for the European market today, with positive sentiment reflected in stock movements, as well as ongoing geopolitical and corporate developments that will likely influence market behavior.