European Factors to Watch-Shares to ease on global growth worries

Thu May 2, 2013 2:51am EDT

LONDON, May 2 (Reuters) - European shares were set to fall on Thursday, with
concerns about the global economy's health and caution ahead of the European
Central Bank's policy meeting prompting investors to trim their trading
positions.
    China's factory-sector growth eased in April as new export orders fell for
the first time this year, suggesting the euro zone recession and sluggish U.S.
demand may be reining in the country's economic recovery. 
    Data from payrolls processor ADP on Wednesday, when most European bourses
were shut for holidays, showed U.S. private sector employers added 119,000 jobs
in April, well below expectations. A separate report from the Institute for
Supply Management showed the manufacturing sector expanded only modestly in
April. 
    The ADP report raised concerns about Friday's U.S. non-farm payrolls data
for April, with the market expecting an addition of 145,000 jobs. March figures
came in well below expectations at 88,000, triggering a sharp drop in equities.
    "Until now, most of the economist thought it was no more than a one time
dip. There is some fear that Friday's payroll report may disappoint again," said
Koen De Leus, senior economist at KBC, in Brussels. 
    Investors' focus will be on the European Central Bank, which is likely to
cut its main interest rate by 25 basis points to a record low of 0.5 percent on
Thursday. Analysts said a rate cut was largely priced in as European shares rose
nearly 4 percent last week, and any disappointment could spark a sharp sell-off.
    "A rate cut of 25 basis points is priced in, so it is unlikely to produce a
strong positive reaction in the market. There is quite a bit of scope for
disappointment if nothing is done," Philippe Gijsels, head of research at BNP
Paribas Fortis Global Markets in Brussels, said.
    "A scenario in which we could see a positive reaction is that a cut is
delivered and (ECB President) Mario Draghi keeps the door open for more cuts and
exceptional policies like quantitative easing."
    Central banks have been working hard to help the economy, but the market
expects more bold steps. On Wednesday, the U.S. Federal Reserve said it will
continue buying $85 billion in bonds each month to keep interest rates low and
spur growth, adding it would step up purchases if needed to protect the economy.
 
    At 0643 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were 0.1 percent to 0.2
percent lower.
    The earnings season will continue to inject volatility into the market.
According to Thomson Reuters StarMine data, half of the STOXX Europe 600
 companies that have announced results so far have missed analysts'
forecasts. 
    The index, which has seen results from 46 percent of its companies so far,
lags the United States, where 64 percent of S&P 500 constituents have
reported, with only 26 percent missing predictions. 
    German industrial bellwether Siemens toned down its full-year
outlook on Thursday as weak demand in the industrial sector and project charges
weighed on its quarterly profit. German fashion house Hugo Boss 
reported a bigger than expected decline in first-quarter sales. 
 
    
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     MARKET SNAPSHOT AT 647 GMT                                        
                                                      LAST    PCT CHG   NET CHG
     S&P 500                                      1,582.70    -0.93 %    -14.87
     NIKKEI                                      13,694.04    -0.76 %   -105.31
     MSCI ASIA EX-JP                                552.10    -0.07 %     -0.36
     EUR/USD                                        1.3156    -0.16 %   -0.0021
     USD/JPY                                         97.29    -0.09 %   -0.0900
     10-YR US TSY YLD                                1.636         --      0.00
     10-YR BUND YLD                                  1.199         --     -0.01
     SPOT GOLD                                   $1,454.71    -0.14 %    -$2.03
     US CRUDE                                       $90.79    -0.26 %     -0.24
 
    * Asian shares fall on fears for health of world economy     
    * Nikkei heads for 4th day of losses on global growth worries 
    * Wall St drops on data, earnings; Facebook up late          
    * Euro eases ahead of ECB, off 2-month high vs dlr           
    * Shanghai copper tumbles near 5 pct on growth concerns      
    * Gold holds near 1-week low, ETFs outflows persist          
    * Brent holds near $100, shaky economic outlook caps gains   
    * TREASURIES-Yields near four-month lows                     
    
    COMPANY NEWS
    
    SIEMENS 
    German industrial bellwether Siemens took a more pessimistic
stance on the rest of the year as industry demand remained weak and project
charges weighed on quarterly profits. 
    
    ROLLS ROYCE 
    Rolls-Royce said it was on track to report good growth in underlying profit
in 2013, after a strong first quarter from its civil aerospace unit.
 
     
    BMW 
    Germany's BMW said first-quarter underlying group profit fell less than
expected to 2 billion euros ($2.64 billion), as costly discounts in core
European markets and weakening Chinese deliveries weighed on results.
 
    
    SANOFI 
    The pharmaceutical maker reported lower-than-expected first-quarter earnings
on Thursday as the effects of last year's patent losses damped growth from
diabetes drugs, vaccines and rare disease unit Genzyme. 
  
    CAPGEMINI 
    The information technology services group posted sales down 1.7 percent to
2.499 billion euros ($3.3 billion) on a comparable basis hit in part by weakness
in its largest market, France. 
    
    INFINEON 
    German chipmaker Infineon on Thursday reported a
better-than-expected second-quarter operating profit on improvement at its
automotive unit, which accounts for about half of its revenues. 
    
    ING GROEP NV's  
    The Dutch financial services group's U.S. unit raised $1.3 billion in its
initial public offering on Wednesday, less than expected, though the offering
ranked as the second largest U.S. float of the year. 
 
    FRANCE TELECOM 
    France's industry minister said he had blocked Yahoo Inc's plan to
buy a majority stake in online video website Dailymotion because the U.S. group
wanted to "devour" its smaller competitor.  Dailymotion is owned by France
Telecom.  
    
    CREDIT AGRICOLE 
    The French bank cleared the final hurdle to exit the British gas market when
energy regulator Ofgem on Wednesday approved the bank's request to cancel its UK
gas trading licence. 
    
    ROYAL DUTCH SHELL  
    Europe's top oil company said on Thursday that its chief executive since
2009, Peter Voser, would retire next year as it reported first quarter results
that beat expectations. 
    
    BSKYB 
    Britain's BSkyB said it would create 550 new jobs to meet the strong demand
for its new products, as it reported third quarter results showing sales and
profit racing ahead. 
 
    EDF 
    The French electric utility said on Tuesday cost-cuts and higher nuclear
production should boost second-half profits after cold weather helped to produce
a 4.7 percent increase in the company's first quarter sales on a like-for-like
basis. 
    
    SWISS RE 
    Swiss Re said first quarter profits rose 21 percent rise, driven by a 9
percent rise in premium and fee income, low catastrophe losses and the expiry of
a quota share agreement with Warren Buffett's Berkshire Hathaway. For
related nws, click on 
    
    SCHRODERS 
    British fund manager Schroders attracted 5.6 billion pounds ($8.7
billion) of net new money in the first quarter, buoyed by strong retail demand
for equities that it warned was unlikely to continue. 
    
    METRO AG 
    German retailer Metro AG said trading remained tough, especially
in western Europe, but managed to eke out a first-quarter profit thanks to
improved business at its consumer electronic and supermarkets in Germany.
 

    CARREFOUR 
    Europe's largest retailer said on Tuesday it was staying in Turkey but
selling a 12 percent stake in local venture CarrefourSA to joint
venture partner Sabanci Holding for 60 million euros ($79 million).
 
 
    VIVENDI  
    The media-to-telecom conglomerate said on Tuesday that it would consider a
public listing of its French telecom operator SFR as part of its plan to reduce
exposure to the capital-intensive unit in favor of its media businesses.
 
    
    STATOIL 
    Oil firm Statoil reported first-quarter results below expectations with
production problems at major gas fields Troll and Snoehvit off Norway and oil
and gas field Peregrino off Brazil. For more on the company, click on 
 
    DSM  
    The Dutch food and chemicals group reported first-quarter results in line
with expectations on Thursday and said it was on track to meet its full-year
profit target. 
    
    EDF 
    The French electric utility said on Tuesday cost-cuts and higher nuclear
production should boost second-half profits after cold weather helped to produce
a 4.7 percent increase in the company's first quarter sales on a like-for-like
basis. 
     
    BT 
    UK telecoms regulator Ofcom has launched a probe into whether BT Group is
abusing its dominant position when pricing its superfast broadband, following a
complaint by smaller rival TalkTalk Telecom Group. 
    
    RANDGOLD RESOURCES 
    Africa-focused Randgold Resources posted a more than 20 percent drop in
profit on Thursday, hit in the first three months by a reduced contribution from
its Loulo-Gounkoto mine in Mali, lower prices and ounces of gold left unsold.
 
    
    GLENCORE XSTRATA 
    After years of on-off talks, months of brinkmanship and often bitter
negotiations, Glencore will complete the $30 billion acquisition of Xstrata on
Thursday, the mining industry's biggest takeover yet. Shares in the newly merged
company begin trading on Friday.
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