European Factors to Watch - Shares seen flat to lower, food stocks to weigh

Tue Feb 19, 2013 2:27am EST

LONDON, Feb 19 (Reuters) - European stocks were expected to open flat to
lower Tuesday, with mixed earnings corporate capping appetite for shares and
German sentiment data due later in the day likely to determine the market's
direction.    
    At 0720 GMT, futures for the Euro STOXX 50 were flat, while
contracts on Germany's DAX, France's CAC and Britain's FTSE 100
 were down 0.1 percent.
    Most Asian indexes barely moved on Tuesday and their European peers may also
struggle for direction early on as Wall Street, the world's largest stock market
and a global barometer of investor sentiment towards equities, was shut for a
national holiday on Monday. 
    Corporate earnings and outlooks, a key market driver this month, painted a
mixed picture.
    French food group Danone reported fractionally
better-than-expected sales for last year but it warned of a blow to its profits
in 2013 as economic weakness in southern Europe hits its core dairy business.
 
    In a possible further drag to the food and beverages sector, the
world's biggest food company, Nestle, has removed beef pasta meals
from sale in Italy and Spain after finding traces of horse DNA. 
    Spanish motorway group Abertis managed to meet analyst expectations
with its full-year profit as traffic declines in France and Spain were offset by
growth in Latin America. 
    Of interest to the European auto sector, Bridgestone 
forecast a 34 percent jump in operating profit for this year, sending its shares
up 10.3 percent in Tokio. 
    With just over a third of the European earnings season now behind us, 39
percent of companies that have reported so have missed consensus estimates,
leading analysts to cut their 2013 estimates by 2.1 percent, Starmine data
showed.
    Markets may also take cue from Germany's ZEW survey, a gauge of investor and
analyst sentiment in Europe's largest economy due to be published at 1000 GMT.
Economists were expecting the index to have risen to 35 points this month from
31.5 in January.    
    "With the German ZEW confidence numbers due later today (the Dax) is likely
to show improvement," Chris Weston, chief market strategist at IG, said in a
trading note.           
    The euro zone blue-chip Euro STOXX 50, up 0.1 percent at
2,616.65 on Monday, has fallen nearly 6 percent since the start of February as
lacklustre corporate earnings fuelled some profit-taking after a strong start to
the year and investors grew anxious about a tight general election race in
debt-laden Italy.
    Arthur Van Slooten, a strategist at Societe Generale in Paris, said the
recent pullback could provide a buying opportunity in euro zone banks and
southern European shares if the Italian vote on Feb 24-25 delivers a government
likely to continue with reforms to tackle Italy's debt problems.
    "There is some uncertainty about Italy because of the elections but I do not
expect extreme outcomes," Van Slooten said.
    "Assuming that the outcome will not be as bad as feared in this point in
time...within financials we would still see (buying) possibilities."
    
--------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0620 GMT:
                                             LAST   PCT CHG   NET CHG
 NIKKEI                                 11,372.34   -0.31 %    -35.53
 MSCI ASIA EX-JP                           555.60   -0.26 %     -1.43
 EUR/USD                                   1.3339   -0.09 %   -0.0012
 USD/JPY                                    93.52   -0.46 %   -0.4300
 10-YR BUND YLD                             1.618        --     -0.01
 SPOT GOLD                              $1,611.96    0.15 %     $2.41
 US CRUDE                                  $95.39   -0.49 %     -0.47
 
  
  > Asian shares listless, yen firmer but near lows            
  > Tokyo shares lack direction, Fanuc weighs on Nikkei        
  > Yen rises after Japan plays down foreign bond buying talk  
  > Gold inches up on Asia demand; firm dollar caps gains      
  > London copper up on bargain hunting; China holds fire      
  > Brent holds above $117 after 3-session fall                
    
    COMPANY NEWS:
    
    NESTLE 
    The world's biggest food company removed beef pasta meals from shelves in
Italy and Spain on Monday after tests revealed traces of horse DNA above 1
percent, the Financial Times online reported, citing a company statement.
    
    NOBEL BIOCARE 
    Swiss dental implant maker Nobel Biocare said it expects difficult
conditions this year, after fourth-quarter net profit dropped 16 percent to 11.2
million euros ($14.95 million) amid a sharp fall in sales in Japan.
    
    SANOFI 
    The French drugmaker said on Tuesday that its experimental
diabetes drug lixisenatide has been accepted for review by the U.S. Food and
Drug Administration. 
    
     MAN SE 
    Chief Financial Officer Frank Lutz is leaving the company with immediate
effect, before the group becomes fully integrated into Volkswagen.
 
    
    RWE 
    Czech energy firm EPH will bid with a partner for Net4Gas, the Czech gas
transmission system operator owned by RWE, a spokesman said on Monday.
 
    
    
    DAIMLER, BMW, VW 
    German proposals to protect its output of big, luxury cars threaten EU plans
to limit carbon emissions by 2020 and could jeopardise future ambitions, a
document from the bloc's executive said on Monday. 
    
    
    DEUTSCHE BANK, Commerzbank 
    Bankers' bonuses could be pegged at no more than their annual salaries if
European Union lawmakers and member states reach agreement in key talks on
Tuesday. 

    KLOECKNER 
    German billionaire Albrecht Knauf has taken a 7.8 percent stake in the steel
distributor, becoming its largest shareholder.
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