| Want the lowdown on what's moving European markets in your inbox every morning? Sign up here. Good morning. Stocks are trending higher, Sanofi is cashing out of a lucrative investment and the U.K. is taking steps to reopen more businesses. Here's what's moving markets. Firm Markets Traders coming back to work in the U.K. and the U.S. from a long holiday weekend might be surprised to find the tone is positive in global markets. Asia stocks are gaining for a second day, as investors look past China's effort to tighten its grip on Hong Kong and simmering trade tensions with the U.S. European stocks rallied heartily on Monday, and oil is peeking back above $34 a barrel. The newsflow on the coronavirus pandemic is reassuring -- as reassuring as it can be with a death toll above 346,000 -- even as epidemiologists warn of a possible second wave to the outbreak. Sanofi Cashes Out Deal-making never really seems to slow down in the pharmaceutical industry, and judging by the news from Paris late Monday, that won't change any time soon. Drugmaker Sanofi is selling most of its $13.2 billion stake in U.S. partner Regeneron Pharmaceuticals Inc. in a whopping stock offering. The French company is likely to invest the proceeds in fast-growing fields such as cancer treatments, possibly through acquisitions. Sanofi bought a big chunk of its Regeneron stake in 2007, at $26 a share. The stock's last close: Almost $570. Government Aid France unveils its plan to support the auto industry today, and President Emmanuel Macron will be nudging Peugeot SA and Renault SA to bring some production back home. Macron will also pledge incentives for the purchase of electric and low-emission vehicles. Renault and partners Nissan Motor Co. and Mitsubishi Motors Corp. will follow up Wednesday with a strategy presentation that's likely to include deep cost cuts. Meanwhile, the biggest corporate rescue in Germany became official Monday: The government will take a stake in Deutsche Lufthansa AG in a $9.8 billion bailout that's likely to be challenged by rival airlines, though European Union approval is still needed. U.K. Reopening The U.K. is taking steps towards getting back to business. Prime Minister Boris Johnson announced Monday evening that car dealers and outdoor markets can resume operations on June 1 and non-essential retailers will be allowed to open June 15. The news gives Johnson a chance to try to move beyond the political storm over his key aide's alleged flouting of the lockdown rules. Coming Up… Investors will get readings on business confidence in France as well as consumer confidence and new home sales in the U.S. And traders will be back on the floor of the New York Stock Exchange for the first time in more than two months, confounding some industry watchers who speculated the pandemic might force the Big Board to decide there's no longer a need for an open-outcry business. The NYSE, which has clung to in-person trading for many years after most exchanges shut their floors, isn't ready to call it quits yet. What We've Been Reading This is what's caught our eye over the past few days. And finally, here's what Cormac Mullen is interested in this morning Hong Kong is back at the centre of financial market attention again. The city's benchmark stock index slumped the most in five years on Friday after China's dramatic move to crack down on dissent. It extended losses Monday after the return of weekend protests and steadied Tuesday. Between the new security law and the coronavirus outbreak, investors are taking a much more serious view of current events than they did of last year's unrest -- Hong Kong stock valuations have plunged to their lowest in 15 years against global peers. The MSCI Hong Kong Index -- which has a more domestic focus than the China-heavy Hang Seng -- is trading at about 14 times forward earnings, compared to more than 18 times for the MSCI AC World Index. And while that might prick up the ears of value investors, it's likely that analysts have yet to price in another summer of discontent in the city, should the protests escalate. That's understandable, given they already have the arduous task of trying to judge the impact of the economic hit from the coronavirus. China's move represents the biggest challenge yet to the "one country, two systems" framework that underpins much of the financial attractions of Hong Kong. The pushback has only just begun. That suggests Hong Kong shares will continue to languish against their global counterparts.  Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo. | 
Post a Comment