Europe open: Markets rangebound as investors gear up for US election risk

4th Nov 2024 07:58

(Sharecast News) - European stocks were mixed on Monday morning as investors sat on their hands ahead of a number of monumental risk events in the coming days which could decide the future trajectory for markets in the coming months.

The Stoxx 600 was up just 0.1% at 511.36 by 0932 CET, edging higher for the second straight day after dropping to its lowest since mid-August last Thursday.

London's FTSE 100 was performing well early on, up 0.4%, while indices in Frankfurt and Milan were in the red and Paris and Madrid were flat, with markets broadly rangebound as investors scaled back their appetite for risk.

"There is a formidable amount of event risk coming up for markets in the next few days, which will test the stamina of investors. The US election, economic data, earnings and two key central bank meetings," said Kathleen Brooks, research director at XTB.

Financial markets expect former president Donald Trump to beat vice president Kamala Harris, with the 'Trump trade' - a stronger dollar, weaker bonds and stronger crypto - having performed well in recent weeks.

"With one day left of this campaign, the dollar is falling, and the dollar index is at a two-week low. Thus, if Harris does win on Tuesday we could see a rapid unwinding of this trade, a sharp weakening of the dollar and intense volatility in the FX and bond market," Brooks said.

The economic data calendar looked relatively quiet on Monday, with a bunch of HCOB manufacturing surveys from Italy, France and Germany the only notable releases of the day.

Market movers

Burberry shares were higher on the back of speculation that Italian luxury fashion group Moncler could launch a takeover offer for the British counterpart following a sharp decline in the share price this year. According to Reuters however, Moncler called the rumours "unsubstantiated".

London and Dublin-listed Ryanair was flying lower after cutting its full-year traffic forecast and reporting a drop in first-half profits, as it took a hit from lower fares and Boeing delays.

Anglo American gained after the A$1.6bn (£0.8bn) sale of its 33.3% stake in the Jellinbah joint venture in Australia as part of its strategy to exit the steelmaking coal industry. The miner said the process to offload the rest of its steelmaking coal mines is "now at an advanced stage".