European Factors to Watch - Pullback due as Fed dampens stimulus bets
By Francesco Canepa
LONDON Oct 31 (Reuters) - European stocks were seen pulling back from five-year highs on Thursday after the U.S. Federal Reserve adopted a more hawkish tone than the market had anticipated, dampening expectations for continued monetary stimulus well into the New Year.
At 0722 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were down between 0.2 percent and 0.4 percent.
The Fed kept its $85 billion-a-month stimulus plan intact as the market widely expected, but the central bank did not sound as alarmed about the state of the economy as some had anticipated, removing a reference to tighter financial conditions from its announcement.
U.S. stocks sold off slightly after the announcement, which was seen as increasing the odds that the Fed will start reducing its equity-friendly asset purchase programme earlier than March, the market's consensus expectation before the Fed's meeting.
"We're going to see traders take stock of this and take profit," said Farhan Ahmad, a trader at Tradenext, adding he would need to see a 10 percent drop in major indexes before booming a buyer again.
"The economic data from the U.S. and from Europe says (the economy) is still licking its wounds, so I would like to see a bigger drop than most people expect."
The pan-European FTSEurofirst 300 index is up 3.2 percent so far this month, boosted by the expectations of continued U.S. monetary stimulus, relief at a political deal to avert a U.S. sovereign default and, more recently, some solid corporate earnings.
The earnings picture on Thursday was mixed as drugmaker Bayer and oil& gas producer BG Group posted better-than-expected numbers while Royal Dutch Shell's profits undershot analysts' forecasts.
Around 53 percent of STOXX Europe 600 companies have met or beaten expectations so far this quarter, Thomson Reuters StarMine data showed, roughly in line with the average over the last few quarters.
> Asian markets take glancing hit from Fed, BOJ softens blow > US STOCKS-S&P 500's rally ends after Fed > Nikkei retreats from 1-week high; Honda, Toshiba fall > U.S. Treasuries' prices fall as Fed seen more hawkish > Dollar clings near 2-week high as Fed dodges ultra-doves > Gold eases despite Fed as investors take profits > Copper slips, set for first monthly loss in four > Brent holds above $109 on Libya
ROYAL DUTCH SHELL
The oil major's third quarter profits undershot analysts' forecasts on Thursday as a weak refining environment and production losses due to disruption in Nigeria weighed on its performance.
French oil major Total has discovered "significant" oil and gas reserves in the Kurdistan region of Iraq, where it owns a 35 percent stake in an exploration project with Marathon oil and the regional government.
The diversified miner said copper production rose 23 percent in the third quarter, thanks to increases in Africa and improvements at a Chilean mine, while profitability in its trading arm was "in line" with expectations.
The miner said copper production was in line with expectations at 174,200 tonnes in Q3 2013.
The French cosmetics maker said like-for-like sales growth slowed to 4.1 percent in the third quarter as retailers in North America slashed inventories in response to a market slowdown.
The world's largest beer maker forecast a decline in beer sales in its huge Brazilian market this year as high food price inflation squeezed disposable income.
France's No. 1 bank said third-quarter net income rose 2.4 percent as it fought fading growth and a lackluster economic environment in its core European markets with cost cuts.
Denmark's biggest financial institution lowered full-year earnings expectations and said it planned further job cuts after posting lower-than-expected pretax profit in the third quarter.
Germany's largest drugmaker, posted a better-than-expected 7.7 percent gain in adjusted core earnings, helped by strong sales growth of newly introduced pharmaceuticals.
The world's biggest insulin producer forecast high-single digit profit growth next year after reporting a 1.6 percent rise in operating profit in the third quarter, aided by strong sales of diabetes drug Victoza and modern insulins.
An experimental drug that mimics the effects of two naturally occurring hormones appears to work significantly better than existing single-hormone medicines against diabetes and obesity, scientists said on Wednesday.
The world's largest maker of dental implants said third-quarter sales slipped 1 percent dragged down by a weaker Japanese yen.
Specialty chemicals and life science group Lonza said its restructuring plan was fully on track as it confirmed its full year guidance on Thursday.
The British former state telecoms monopoly said more than 2 million homes have signed up to take its new sports service, the group said on Thursday, as it reported strong trading for the first set of results under new chief executive Gavin Patterson.
The mobile phone operator lowered its 2013 revenue guidance on Thursday on weak figures in its key Danish and Norwegian markets but kept its profit margin outlook and increased its investment forecast.
The telecom equipment maker posted higher revenue and a narrower net loss in the third quarter compared with the same period last year, helped by double-digit growth in the highly profitable U.S. market.
The Franco-Dutch airline group posted a 29 percent rise in third-quarter operating earnings on Thursday despite flat revenue and maintained its full-year forecasts while warning of continued weakness in its medium-haul and cargo businesses.
The Dutch staffing firm reported slightly higher-than-expected third-quarter profit on Thursday, as many of its European markets picked up, and appointed a new chief executive.