European Factors to Watch-Shares to fall on unease over Syria

Tue Aug 27, 2013 2:38am EDT

LONDON, Aug 27 (Reuters) - European shares were expected to fall on Tuesday
on concerns that the United States was inching towards a possible military
action against Syria over a suspected chemical weapons attack. 
    The United States and its allies have met in Jordan for what could be a
council of war, should they decide to punish Syrian President Bashar al-Assad,
who has denied using chemical weapons and blamed rebels for staging such
attacks. 
    "An escalation in geopolitical tension is not good for investor sentiment.
People might just be waiting for some clarity before they look to react," Keith
Bowman, equity analyst at Hargreaves Lansdown, said.
    U.S. shares fell late on Monday after U.S. Secretary of State John Kerry
said President Barack Obama "believes there must be accountability for those who
would use the world's most heinous weapons against the world's most vulnerable
people."
    "The apparent certainty that military action against Syria is on its way has
traders highly uncertain about what the repercussions will be for igniting a
powder keg in such an already volatile region," Capital Spreads dealer Jonathan
Sudaria wrote in a note.
    "Traders will be shying away from risky assets until there is some clarity
about the future path of military intervention from the West."
    A day after a public holiday in the United Kingdom, futures for Britain's
FTSE 100 < were 0.4 percent lower. Futures for the Euro STOXX 50
, Germany's DAX and France's CAC were 0.4 to 0.5 percent
weaker.
    IG Markets predicted Italy's FTSE MIB index to fall further and
underperform the wider market. It saw the index declining about 0.8 percent on
concerns about the stability of the ruling coalition, with Silvio Berlusconi's
centre-right party threatening to bring down the government. 
     Italian shares fell 2.1 percent on Monday, putting pressure on euro zone
stocks, while the country's bond yields rose.
    Investors will keep a close eye on a slew of economic releases for hints
about the timing of the U.S. Federal Reserve's likely move to start trimming its
stimulus measures.
    Federal Reserve Bank of Chicago will release its Chicago Fed Midwest
Manufacturing Index for July at 1230 GMT, ICSC/Goldman Sachs will announce chain
store sales data for the week ended Aug. 21 at 1145 GMT, while Standard & Poor's
will release the S&P Case/Shiller Home Price Index for June at 1300 GMT.
    In Europe, Germany's IFO business climate index for August is due to be
released at 0800 GMT. The index is predicted to have risen to 107.0 from 106.2.
 
    Focus will also be on company results as the second-quarter reporting season
is coming to an end. According to Thomson Reuters StarMine data, 92 percent
companies on the STOXX Europe 600 have reported results, of which 45
percent have missed expectations, while the rest have met or beaten. In the
previous quarter, 48 percent companies missed forecasts.
    On Tuesday, Chilean copper miner Antofagasta posted a 31.2 percent
drop in first-half core profit, while offshore engineering firm Aker Solutions
 reported earnings short of expectations and said its order backlog and
capacity utilisation fell. 
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     MARKET SNAPSHOT AT 0633 GMT                                      
                                                     LAST    PCT CHG   NET CHG
     S&P 500                                     1,656.78     -0.4 %     -6.72
     NIKKEI                                     13,542.37    -0.69 %    -93.91
     MSCI ASIA EX-JP                               500.10    -1.19 %     -6.02
     EUR/USD                                       1.3363    -0.04 %   -0.0005
     USD/JPY                                        98.09    -0.42 %   -0.4100
     10-YR US TSY YLD                               2.787         --      0.00
     10-YR BUND YLD                                 1.890         --     -0.01
     SPOT GOLD                                  $1,399.00    -0.38 %    -$5.40
     US CRUDE                                     $106.17     0.24 %      0.25
  > Geopolitical jitters unsettle Asia stocks; yen rises             
  > Wall St ends lower after Kerry blasts Syria on chemical weapons         
  > Nikkei flat in subdued trading; Syria tensions weigh                    
  > Government bond prices gain on weaker economic data                   
  > Yen edges higher as Syria jitters hit risk sentiment                  
  > Gold holds above $1,400, weak U.S. data helps                         
  > Copper in tight range after mixed China, US data                     
  > Brent tops $111 on rising tension over Syria attack                    
    
    COMPANY NEWS
    ANTOFAGASTA 
    Chilean copper miner Antofagasta posted a 31.2 percent drop in first-half
core profit as lower prices and higher costs offset the impact of higher
production. 
    
    PETROFAC 
    British energy services firm Petrofac PFC.L reported an expected 12.5
percent fall in revenue on Tuesday, saying earnings would be heavily weighted to
the second half due to the timing of key projects. 
    
    AKER SOLUTIONS 
    Offshore engineering firm Aker Solutions reported earnings short of
expectations and said its order backlog and capacity utilisation fell as clients
delayed or cancelled projects. 
    
    DAIMLER 
    Unveiling details of its China strategy in Beijing on Tuesday, Daimler's new
China chief said the company would spend 2 billion euros over the next two years
as it seeks to boost sales of Mercedes-Benz cars in China by a third to more
than 300,000 cars a year by 2015. Related news 
    
    E.ON 
    The German utility is considering mothballing its nuclear power plants,
German tabloid Bild reported, citing senior executive Mike Winkel. Power plants
are only profitable if wholesale prices don't sink further below 35-36 euros per
Megawatt-hour. Currently they barely cover the operating costs for the four E.ON
nuclear plants. Related news 
    
    VOLKSWAGEN 
    The German carmaker is having some difficulty setting up its newest car
plant in China, in Urumqi in the mainly Muslim populated western province of
Xinjiang. While the plant will open this year, the body shop and the paint shop
are not yet completed. Related news 
    
    ACCOR 
    Accor is set to appoint Sebastien Bazin, the French hotel group's
vice-chairman, as its new chief executive, two sources close to the matter said
on Tuesday, confirming earlier press reports.