march 3  welcome to the home for realtime coverage of markets brought to you by reuters reporters you can share your thoughts with us at marketsresearchthomsonreuterscom not all value sectors are created equal 1130 gmt autos and banks may underperform other value stocks like healthcare in the current environment according to bnp strategists with the market pricing of 2022 ecb rate hikes dropping to under 20bp from 50bp in the last fortnight and increasing geopolitical tensions they take a more selective view on value sectors with defensiveness and quality in focus we see a cautious stance from central banks as the key risk for european banks in addition given continued negative real wage growth in the medium term we expect latecycle concerns to weigh on european car makers they say healthcare names are their value stock of choice with large cap european pharma names trading at a high discount to their us counterparts despite strong earnings outlooks cutting its yearend target for the euro stoxx 50 stoxx50e by 7 to 4200 due to escalating geopolitical tensions the strategists advise against buying the current dip amid slower growth inflation and policy tightening risks after opening virtually flat european stocks are struggling to find direction this morning as investors take shelter against a tumultuous geopolitical backdrop the stoxx 600 was trading a fraction higher earlier but is now 012 in the red sector performance is a mixed bag with basic resources sxpp companies at the top of the list gaining 32 banks and oil and gas companies are up 12 and 11 respectively meanwhile utilities are down 17 the volatility meter for euro zone equities v2tx is off its march 1 high but remains elevated at 38 points down 22 this morning minutes from the european central banks february meeting are due later on thursday but last months shock hawkish pivot seems like distant history now with brent crude up some 30 a barrel since midfebruary and european gas prices more than doubling in this period the ecb will be looking with alarm at spiralling inflation expectations tenyear german breakevens which reflect future inflation have jumped 40 basis points since that february ecb meeting  and while estimates vary widely of how the war will impact euro zone gdp a growth hit is certain and thats dampening the likelihood of nearterm policy tightening with markets paring expectations of an ecb rate rise this year swathes of the regional bond market are back into negativeyield territory moves are more pronounced in real yields  borrowing costs after stripping out inflation  german 10year real yields are at record lows below 2 us treasury real yields recovered a touch on wednesday after federal reserve chairman jerome powell clearly signalled a quarterpoint rate rise was on the cards at the feds march 1516 meeting though tenyear real yields around 09 are still half where they were earlier this month stock markets are reflecting this transatlantic divide and citi advise clients to add exposure to us stocks in particular the tech sector which benefits from falling real yields but they also remain positive on commodityheavy uk stocks european stocks are opening weaker despite a strong wall street close following powells clear signal that a 50 bps rate rise is unlikely the bad news continues to pour in on the russia front societe generale acknowledged an 186 billioneuro exposure to the country its further bad news for european banking stocks already down more than 20 since midfebruary read more  key developments that should provide more direction to markets on thursday japans service sector activity contracts at fastest pace in 21 months read more chinas feb services activity expands at slowest rate in six months read more following a close on wednesday near the sessions highs in another day of highly volatile conditions european shares look set to steady as investors closely watch developments in ukraine after reports that a ukrainian delegation has departed for a second round of talks with russia read more eurostoxx 50 futures were flat following gains in asia and a strong close on wall street after fed chair powell signalled the central bank would likely raise rates less than some investors had feared even as oil prices continue to rally us equity derivatives were also little changed