European Factors to Watch -Shares to pause as results paint mixed picture

Wed Feb 13, 2013 2:30am EST

LONDON, Feb 13 (Reuters) - European stocks were expected to open
flat-to-lower on Wednesday as a batch of mixed corporate earnings from key
blue-chip companies prompted a pause after solid gains in the previous session.
    Figures from French bank Societe Generale and Nordic Mobile
telecoms firm Telenor missed analyst expectations, hit by weakness in
the euro zone and Denmark respectively.  
    But Heineken, the world's third largest brewer, beat consensus
thanks to growth in Africa and the Americas, and Britain's household goods firm
Reckitt Benckiser beat full-year earning expectations, benefitting from
sales of medicines and tissues in an unusually heavy U.S. cold and flu season.
  
    At 0722 GMT, futures for the Euro STOXX 50 were 0.1 percent lower,
contracts on Germany's DAX were flat and France's CAC futures
were down 0.2 percent.
    Britain's FTSE 100 was seen opening 23 to 25 points lower, or as
much as 0.4 percent, according to financial spreadbetters, with ex-dividend
factors accounting for around 17 points of that expected fall as market-makers
adjusted prices for key stocks such as AstraZeneca and BP.
 
    The euro zone Euro STOXX 50 index rose 1 percent to 2,648.83
points on Tuesday, halting at a technical resistance level roughly corresponding
to the 61.8 percent retracement of the selloff seen in the second half of 2011.
    The index has retreated from an 18-month high hit last month as investors
took profit on a 34 percent rally on the index between June and the end of
January.
    A Nomura sentiment indicator based on mutual fund flows showed investors
were at their most optimistic in the index's 10-year history, apart from two
periods between February and March 2000 and April to May 2006, which were
followed by market declines in the following weeks. 
    "Recent inflows into equity mutual funds have been extended, reflecting very
bullish sentiment," Nomura's analyst Mark Diver said. "This has often
historically been followed by short term market declines in subsequent weeks."
    But Diver remained bullish on equities on a six to 12 months views, arguing
a rotation out of low-yielding bonds into asset classes offering higher returns,
such as equities, should support shares in the next six to 12 months.
    Euro zone equities offered annual returns 9.2 percent higher than the
10-year German Bund for the next 12 months, Datastream data showed.
    Charts showed the Euro STOXX 50 has already started slowly to rebound from a
one-month low hit last week, helped by improved sentiment in the euro zone after
a strong auction of Spanish debt and reassuring comments by the ECB President
Mario Draghi earlier this week.
    The index has found support at 2,600 points, a technical level corresponding
to the 50 percent retracement of a rally between November and January and it was
likely to rise back to its previous high at 2,754, said Nicolas Suiffet, an
analyst at Paris-based firm Trading Central said.
    "From a chartist point of view, the short term bullish trend remains
intact," Suiffet said.
    "Thus, the current correction could be seen as a buying opportunity for
investors who felt left out from the previous rally."   
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 MARKET SNAPSHOT AT 611 GMT                                   
                                               LAST  PCT CHG   NET CHG
 S&P 500                                   1,519.43   0.16 %      2.42
 NIKKEI                                   11,251.41  -1.04 %   -117.71
 MSCI ASIA EX-JP                                555    0.6 %      3.45
 EUR/USD                                     1.3446  -0.05 %   -0.0007
 USD/JPY                                      93.16  -0.32 %   -0.3000
 10-YR US TSY YLD                             1.973       --     -0.01
 10-YR BUND YLD                               1.638       --      0.00
 SPOT GOLD                                $1,649.21  -0.07 %    -$1.19
 US CRUDE                                    $97.56   0.05 %      0.05
 
  
  > Australia banks lift Asian shares, yen firmer       
  > Wall Street ends slightly higher, Dow near a record 
  > Nikkei slips on profit-taking, Gree tumbles         
  > TREASURIES-Prices dip before retail data            
  > Yen holds gains after gyrations on G7 confusion     
  > Palladium hits 17-mth peak, gold off 1-mth low      
  > Copper inches higher as China outlook lends support 
  > Brent steadies as higher demand outlook supports    
    
    COMPANY NEWS
    
    SOCIETE GENERALE 
    The French bank named a new chief financial officer and reshuffled its
management team after swinging to a loss in the fourth quarter on the back of a
weak euro zone economy and one-off charges. 
    Former Societe Generale trader Jerome Kerviel, who was sentenced to three
years in jail and ordered to repay his former employer 4.9 billion euros, has
asked an employment tribunal to rule on whether he is liable for the losses the
bank said he incurred in France's largest trading scandal. 
    
    HEINEKEN 
    The world's third-largest brewer reported higher-than-expected 2012 profit
on the back of sharply higher earnings from Africa and the Americas and forecast
higher volumes and revenue this year. 
    
    ING 
    The Dutch banking and insurance group announced another 2,400 job cuts in
the Netherlands and Belgium as it prepares to separate its banking and insurance
operations against a backdrop of tough financial markets. 
    
    TOTAL 
    The French oil major posted a 13 percent rise in fourth-quarter adjusted net
profit thanks to high oil prices and a bump in refining margins, prompting it to
increase its exploration budget. It said it would pay a dividend of 2.34 euros
per share for 2012, an increase of 3 percent from 2011. 
    Paris prosecutors asked a criminal court to fine the company 750,000 euros
for corrupting foreign agents during the U.N. oil-for-food programme for Iraq a
decade ago. 
    
    PSA PEUGEOT CITROEN 
    The French carmaker unveiled a 5 billion-euro net loss for 2012, bloated by
asset write-downs, and vowed to halve cash consumption this year even as
European car demand shrinks further. 
    
    LAGARDERE, VIVENDI 
    French media and telecoms group Vivendi said it would fight a legal claim
for 1.6 billion euros by media group Lagardere relating to the companies' Canal+
pay-TV joint venture.  
    Lagardere said the deadlock with Vivendi prevented it from going ahead with
an initial public offering of its Canal+ stake "in normal conditions"
    
    BAYER 
    Bayer said the Food and Drug Administration has granted priority review to
the New Drug Application filed in December 2012 for the investigational oncology
compound radium-223 dichloride (radium-223). The application is under review for
the treatment of castration-resistant prostate cancer (CRPC) patients with bone
metastases. 
    
    K+S 
    The world's top potash producers may abandon attempts to rein in output to
keep prices high, switching to a strategy of ramping up sales as they face
rising competition and big buyers of fertilizer take an increasingly aggressive
stance. 
    
    TUI 
    Indicated 0.2 percent higher
    The German travel and tourism group reported first quarter results that beat
expectations helped by earnings from Europe's largest tour operator TUI Travel
 and a better profitability at its hotel business. 
    
    HOCHTIEF 
    Indicated 2.4 percent higher. Leighton, a unit of German construction
company Hochtief, which in turn is controlled by Spain's ACS, reported a
smaller-than-expected 3 percent fall in second-half net profit and forecast a
stronger 2013, sending its shares up 4 percent.
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