Europe Factors to Watch-Shares set to rise; BES in focus

Thu Jul 31, 2014 2:41am EDT

PARIS, July 31 (Reuters) - European stocks were set to rise on Thursday,
bouncing after the previous day's losses, while Portugal's Banco Espirito Santo
 will in focus after unveiling a massive loss and saying it will start a
capital increase.
    Investors were combing through a batch in corporate results from blue-chips
such as Sanofi, Anheuser-Busch InBev, Siemens,
AstraZeneca and Royal Dutch Shell.
    At 0640 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were flat to up 0.3
percent.
    Banco Espirito Santo's new management said late on Wednesday that laws may
have been broken at the bank during a catastrophic six months that saw it lose
3.6 billion euros ($4.8 billion). Shares in Banco Espirito Santo have plummeted
69 percent since mid-June. 
    France's BNP Paribas will also be in the spotlight after it posted
a second-quarter loss, reflecting the cost of an $8.95 billion fine for breaking
U.S. sanctions, but the French bank said its strong underlying result was a sign
clients had not been scared off by the affair. 
    European companies with a strong exposure to Latin America, such as
Telefonica and Banco Santander, will be eyed as Argentina
defaulted for the second time in 12 years after hopes for a midnight deal with
holdout creditors were dashed, setting up local stock and bond prices for
declines on Thursday and raising chances a recession could worsen this year.
 
    Telefonica posted on Thursday a 15 percent drop in operating income in the
second quarter, in line with forecasts, hit by weaker currencies in Latin
America while margins remained pressured in some of its key markets.
 
    About 40 percent of STOXX Europe 600 companies have reported
results so far in the earnings season, of which 55 percent have met or beaten
profit forecast, according to Thomson Reuters StarMine data.
    On average, quarterly profits are up 7.1 percent year-over-year, data shows,
fuelling hopes of a long-awaited recovery in European profits this year.
    On Wall Street on Wednesday, both the S&P 500 and Nasdaq 
ended higher after the U.S. Federal Reserve gave a rosier assessment of the
economy while reaffirming that it was in no hurry to raise interest rates. The
U.S. central bank also, as expected, reduced its monthly asset purchases to $25
billion from $35 billion. 
            
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0640 GMT:
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,970.07   0.01 %     0.12
 NIKKEI                              15620.77  -0.16 %   -25.46
 MSCI ASIA EX-JP                       510.21  -0.39 %    -1.99
 EUR/USD                                1.339  -0.04 %  -0.0006
 USD/JPY                               102.79   0.01 %   0.0100
 10-YR US TSY YLD                       2.551       --     0.00
 10-YR BUND YLD                         1.175       --     0.01
 SPOT GOLD                          $1,294.10  -0.05 %   -$0.60
 US CRUDE                              $99.50  -0.77 %    -0.77
 
  > GLOBAL MARKETS-DOLLAR UP, U.S. YIELDS SURGE ON UPBEAT U.S. DATA 
  > US STOCKS-S&P 500, NASDAQ END UP AS FED IN NO RUSH TO RAISE RATES 
  > NIKKEI RISES TO FRESH 6-MONTH HIGH LED BY EXPORTERS, BANKS 
  > FOREX-BULLISH DOLLAR ON GOOD US GROWTH, MORE DATA AWAITED 
  > PRECIOUS-GOLD BELOW $1,300 AS U.S. ECONOMIC OPTIMISM DENTS DEMAND 
  > METALS-COPPER UNDERPINNED AS FED RELAXES ON RATE RISE TIMING 
  > BRENT SLIPS TOWARD $106 AS US FUEL DEMAND DISAPPOINTS 
    
    COMPANY NEWS:
    
    BNP PARIBAS 
    BNP Paribas turned in a second-quarter loss on Thursday, reflecting the cost
of an $8.95 billion fine for breaking U.S. sanctions, but the French bank said
its strong underlying result was a sign clients had not been scared off by the
affair. 
    
    SANOFI 
    The French drugmaker raised its full-year guidance on Thursday after it
posted stronger than expected quarterly earnings, driven by its rare disease
business and higher sales in emerging markets. 
        
    ANHEUSER-BUSCH INBEV 
    The world's largest beer maker reported a greater second-quarter profit than
expected on Thursday as the World Cup drove sales in Brazil and both China and
Mexico outperformed. 
    
    ROYAL DUTCH SHELL PLC 
    Oil major Shell, which has been shedding assets to cut costs and streamline
operations, reported a 33 percent increase in adjusted quarterly earnings after
producing more liquids and selling at higher prices. 
    
    ASTRAZENECA 
    AstraZeneca smashed forecasts for second-quarter sales and earnings on
Thursday, demonstrating resilience after seeing off a $118 billion takeover
approach from rival drugmaker Pfizer two months ago. 
    
    LLOYDS 
    Lloyds Banking Group reported a 32 percent increase in underlying first-half
profit, helping it absorb an increase in the cost of compensating customers
mis-sold loan insurance. 
    
    ROLLS ROYCE 
    Engine maker Rolls-Royce said it was on track to meet forecasts for the
year, as it reported an expected 20 percent drop in first-half profit due to
shrinking government defence spending and currency headwinds. 
    
    BAE SYSTEMS 
    Europe's biggest defence contractor BAE Systems posted a 7 percent fall in
half-year profit, as expected, hit by lower military spending in the U.S. and
said on Thursday that its outlook for 2014 was unchanged. 
    
    BG GROUP 
    Oil and gas firm BG Group BG.L reported a 11 percent rise in second-quarter
operating profit, driven by higher LNG volumes and higher realised prices in
Asia and South America. 
    
    CENTRICA 
    British utility Centrica CNA.L posted a 35 percent fall in operating profits
during the first half of the year as mild weather in Britain led to reduced
demand and extreme weather in North America increased costs for the company.
 
    
    SCHRODERS 
    UK fund manager Schroders said assets under management rose to a record
271.5 billion pounds ($459.35 billion) in the first half of the year, after net
inflows more than offset a muted market performance. 
    
    DIAGEO 
    The world's largest distilled drinks maker by sales, posted
weaker-than-expected earnings and sales on Thursday, hurt by a slowdown in China
and volatility in other emerging markets. 
    
    BT 
    Strong demand for fibre broadband and television helped Britain's BT report
first quarter results in line with forecasts, and to keep its outlook unchanged.
 
    
    UNIBAIL RODAMCO 
    Europe's biggest real estate company has agreed to sell a portfolio of six
shopping centres in France to Carmila, a real estate group backed by retailer
Carrefour. 
    
    SIEMENS 
    Germany's warned on Thursday that its energy business faced challenges in
the coming quarters as it reported quarterly core profit that fell short of
expectations. 
    
    SANTANDER 
    The euro zone's biggest bank Santander posted a 38 percent jump in
second-quarter net profit from a year ago, beating forecasts as provisions
against soured debts fell. 
    
    EDF 
    Higher nuclear output in France and Britain drove state-controlled utility
EDF's first-half net profit 8.3 percent higher to 3.1 billion euro (4.15 billion
US dollar) and the group confirmed its full-year financial guidance. 
    
    CARREFOUR 
    The world's second-largest retailer, reported a 13.8 percent rise in
first-half recurring operating profit to 833 million euros ($1.12 billion),
driven by higher profitability in its core French business and in Brazil and
Argentina, while China stayed under pressure. 
    
    METRO AG 
    the German retailer said conditions are still not right to list a stake in
its Russian cash-and-carry business, that was postponed in March due to the
Ukraine crisis. 
    
    TELEFONICA 
    The group posted on Thursday a 15 drop in operating income in the second
quarter, in line with forecasts, hit by weaker currencies in Latin America while
margins remained pressured in some of its key markets. 
    
    JCDECAUX 
    French outdoor advertising and street furniture group reported a 3.3 percent
rise in first-half adjusted revenue to 1.3 billion euros (1.74 billion US
dollar) on Thursday, but said organic growth would be slightly slower in the
third quarter. 
    
    SAFRAN 
    The aerospace group raised its core profit target as it reported higher
first-half earnings on Thursday. 
    
    KERING 
    The luxury and lifestyle group fulfilled its ambition of expanding in Swiss
watchmaking with the acquisition of Ulysse Nardin, as it posted mixed first-half
results that showed further weakness at its flagship Gucci brand.
 
    
    HOCHTIEF 
    The German builder, majority-owned by Spanish building company ACS,
reported on Thursday a 55 percent increase in second-quarter net income as
restructuring of its Australian unit Leighton started to pay off.
 
    
    SAINT-GOBAIN 
    The French building materials group reaffirmed its aim of improving its
profitability this year after posting 4.1 percent organic sales growth in the
first half, driven by demand in the United States and Asia. 
    
    ALLIANZ 
    Bill Gross, manager of the world's largest bond fund Pimco, said Wednesday
that income, rather than capital gains, would drive future investment returns as
a result of low global economic growth. 
    
    ENI 
    The Italian oil major said it had made a significant gas and condensate
discovery offshore Gabon, with initial potential of gas estimated at 500 million
barrels of oil equivalent. 
    
    INGENICO 
    The French payments firm raised its annual organic growth and operating
margin targets after revenue rose sharply in the second quarter, helped by a
transition to chip-and-pin payment terminals in the United States.
 
    
    VALLOUREC 
    The steel pipes maker turned in a second-quarter net profit rise of 41.9
percent to 88 million euros and repeated its recent warning that challenges in
Brazil will eat into its second half performance. 
    
    ERSTE BANK 
    Austria's Erste Group Bank swung to a first-half loss of 929.7 million euros
($1.25 billion) as it booked impairment charges and set aside 130 million euros
for a Hungarian law forcing banks to compensate customers for mispriced loans.
    
    LUFTHANSA 
    Europe's largest airline by revenue reported lower than expected
second-quarter profit as ticket prices fell on North American, Asian and
European routes. 
    
    

 (Reporting by Blaise Robinson; Editing by Alistair Smout)
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