European Factors to Watch-Shares seen steady, focus on earnings

Fri Jan 17, 2014 2:57am EST

LONDON Jan 17 (Reuters) - European shares headed for a steady open on Friday, although any further shock on earnings and data fronts could tempt investors to take profits from recent highs on the last trading day of the week.

After disappointing results from some U.S. major companies including Intel , Goldman Sachs and Citigroup in the previous session, investors' focus has shifted to General Electric and Morgan Stanley , which are due to release their earnings later in the day.

Some sectors and companies will struggle to beat market expectations in the current reporting season, which has been picking up in the United States and will gather pace in the last week of the month in Europe.

Some companies have already been warning. Oil major Royal Dutch Shell said on Friday its fourth-quarter figures were expected to be significantly lower than recent levels of profitability due to current oil and gas prices and problems in the downstream environment.

"The news from Shell clearly will not help confidence. While investors have been aware of the group's challenges, the degree and range of difficulties provide growing concern for a core market investment," Keith Bowman, equity analyst at Hargreaves Lansdown, said.

The warning from Shell follows a poor earnings day in the United States, where Goldman Sachs' earnings fell 21 percent and Citigroup's profit missed expectations due to a sharp fall in bond trading revenues. Chipmaker Intel also missed expectations due to weak spending on servers.

"U.S. earnings have got off without any real fanfare ... Anyone hoping the market would beat recently lowered expectations would be moderately disappointed," IG Markets said in a note.

The market will also scrutinise U.S. data on housing starts, due at 1330 GMT, industrial output numbers at 1415 GMT and University of Michigan's consumer sentiment survey at 145 GMT. In the UK, focus will be on retail sales data at 0930 GMT.

At 0749 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were flat to 0.1 percent higher.

The pan-European FTSEurofirst 300 index closed 0.15 percent lower at 1,337.75 points in the previous session, having climbed 1 percent to a 5-1/2-year high on Wednesday on U.S. data and some strong company results. ---------------------------------------------------------------------------- > Asian stocks, dollar subdued after Wall St losses > Asian stocks, dollar subdued after Wall St losses > Nikkei drops after disappointing U.S. earnings, pause in yen > Prices gain as inflation steady, bunds rally > Dollar takes a breather, Aussie shaky near 3-1/2-year low > Gold poised to snap 3-week rally on economic outlook > LME nickel poised for 6 pct weekly gain on Indonesia export ban > Brent drops toward $105 on rising supply, heads for weekly loss

COMPANY NEWS

ROYAL DUTCH SHELL

Royal Dutch Shell warned on Friday that its fourth-quarter figures are expected to be significantly lower than recent levels of profitability because of current oil and gas prices and problems in the downstream environment.

DAIMLER

Chinese automaker BAIC Motor, partly owned by Daimler, plans to raise up to $2 billion in a Hong Kong initial public offering this year, capitalising on the strong growth prospects for the world's biggest auto market.

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DEUTSCHE LUFTHANSA

Germany's largest airline will appoint management board member Carsten Spohr, currently in charge of its passenger division, as chief executive officer, Bild newspaper cited company sources as saying.

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DEUTSCHE BANK, COMMERZBANK

German banks may face a capital shortfall in stress tests on the sector over the coming months, the head of the country's financial market watchdog Bafin said on Thursday.

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DEUTSCHE TELEKOM

Deutsche Telekom and France's Orange said on Friday they will maintain the current management structure of their joint venture EE, putting on hold plans to float the largest mobile operator in Britain.

Separately, the telecom operator has transferred its ownership of its 67 percent stake in T-Mobile US to a Dutch holding company from a German holding company, fuelling speculation it may be looking to sell the U.S. business.

UK BANKS

Britain's banks will have to shrink and sell off branches in order to improve competition if Labour wins the next election, party leader Ed Miliband will announce on Friday in a speech spelling out his agenda for financial reform.

ESSILOR

Essilor, the world's largest maker of ophthalmic lenses, said on Friday that 2013 like-for-like sales growth reached an estimated 2.1 percent, missing its expectations, amid fierce competition and a challenging economic climate, notably in Europe.

VEOLIA

Britain said on Thursday it will pay France's Veolia Environnement to incinerate 150 tonnes of Syrian poison gas precursors in northern England, the first deal for a private firm to help destroy Syria's chemical arms programme in the UK.

ACCOR

Accor, Europe's largest hotel group, raised its operating profit goal for 2013 on Thursday to reflect robust growth in Europe and in emerging markets and what it said were significant cost savings in the fourth quarter.

EDF

EDF stormed the market this week, selling almost EUR7.5bn-equivalent of hybrid and senior bonds across three currencies to ravenous investors, blazing a trail for others eyeing similar multi-billion transactions.

ROCHE

A temporary shortage in the United States of one of the leading flu medicines used to treat children with the sometimes deadly virus has been resolved, Roche, the maker of Tamiflu, said.

RICHEMONT

Luxury goods group Richemont, whose stable of brands includes jewellers Cartier and Van Cleef & Arpels, has applied to open shops in India, joining other global retailers who entered the market since New Delhi relaxed investment rules.

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