European Factors to Watch-Lower start eyed on German, French growth scare

Thu Aug 14, 2014 2:47am EDT

LONDON, Aug 14 (Reuters) - European stocks were seen opening lower on
Thursday as disappointing economic output data from the euro zone's two largest
economies cast shadows on market bets on an economic recovery in the currency
bloc.    
    At 0645 GMT, futures for the Euro STOXX 50, Germany's DAX 
and France's CAC were down between 0.5 percent and 0.7 percent.
September futures on Britain's FTSE 100 were down 0.3 percent.
    The German economy suffered a surprise contraction in the second quarter,
its first in more than a year, as foreign trade and investment, particularly in
the construction sector, weighed on growth in Europe's largest economy.
 
    France slashed its growth forecasts for this year and the next on Thursday
after its economy failed to grow in the second quarter. 
 
    "Data is getting weaker and this is no longer an environment where we are
overweight equities," said Matthias Thiel, a strategist at M.M.Warburg & CO in
Hamburg, who turned "neutral" on European equities last week.
    "Especially the German data is disappointing and this is why we see more
risk to our scenario that there is a moderate recovery in the euro zone."
    A flash estimate of second-quarter euro zone economic growth is due at 0900
GMT. Economists had expected euro zone GDP to have expanded by 0.2 percent on
the quarter in the three months to June, the same pace as seen in the first
quarter.
    Some strong German corporate results was set to provide some support to the
Dax, however.
    Shares in steelmaker ThyssenKrupp were seen opening 4 percent
higher as the German group said it may return to a net profit this year, raising
its outlook for a second time after restructuring at its steel mill in Brazil
paid off and demand for elevators and chemicals plants bolstered earnings.
 
    German potash miner K+S was seen opening 1 percent higher after
recording a higher-than-expected earnings before interest and tax in the second
quarter. 
    
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
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  MARKET SNAPSHOT AT 0644 GMT:     
                                                 LAST      PCT CHG       NET CHG
 S&P 500                                     1,946.72       0.67 %         12.97
 NIKKEI                                      15314.57       0.66 %        100.94
 MSCI ASIA EX-JP                               506.95        0.1 %          0.53
 EUR/USD                                       1.3358      -0.04 %       -0.0006
 USD/JPY                                       102.49       0.08 %        0.0800
 10-YR US TSY YLD                               2.417           --         -0.01
 10-YR BUND YLD                                 1.013           --         -0.02
 SPOT GOLD                                  $1,313.59       0.09 %         $1.23
 US CRUDE                                      $97.14      -0.46 %         -0.45
  
  > SHARES, BONDS RALLY AS INVESTORS BANK ON ENDLESS STIMULUS      
  > BIOTECHS LIFT WALL ST; DOW BACK IN BLACK FOR 2014              
  > NIKKEI EXTENDS RALLY, SUPPORTED BY PUBLIC BUYING HOPES         
  > BOND YIELDS FALL ON WEAK DATA, 10-YEAR AUCTION SOLID           
  > POUND HITS 4-MONTH LOW AFTER BOE'S DOVISH SHIFT, EURO EYES GDP 
  > GOLD RETAINS GAINS ON SOFT U.S. DATA, SAFE-HAVEN DEMAND        
  > LONDON COPPER SLIPS TO 7-WEEK LOWS ON CHINA WORRIES            
  > BRENT FALLS BELOW $104 AFTER BRIEF RECOVERY FROM 13-MONTH LOW  
    
    COMPANY NEWS:   
    THYSSENKRUPP 
    The German steelmaker said it may return to a net profit this year, raising
its outlook for a second time as restructuring at its steel mill in Brazil paid
off and demand for elevators and chemicals plants bolstered earnings.
 
    
     RWE 
     RWE said its operating earnings fell 40 percent in the first half of 2014,
putting it on track for its third straight year of declining profits as low
wholesale power prices and demand continue to burden Germany's second-biggest
utility. 
    
    VIVENDI TELECOM ITALIA 
    Telecom Italia Chief Executive Marco Patuano met Vivendi chairman Vincent
Bollore on Wednesday to discuss an offer for the French group's Brazilian
broadband unit GVT, two sources with knowledge of the matter said.
 
    
    K+S 
    Operating profit at the German potash miner declined 3.3 percent as lower
prices of the fertiliser mineral were partly offset by an insurance payment for
an accident at one of its mines. 
    
    AEGON 
    The Dutch insurer reported a 7 percent rise in second-quarter profit, helped
by a rise in deposits and gains in equity markets. 
    
    MARKS & SPENCER 
    The British retailer is close to having both its food and general
merchandise divisions "firing on all cylinders" and expects a better Christmas
after poor clothing sales hit last holiday season, according to its food
business head. 
    
    ERSTE GROUP, UNICREDIT 
    Ratings agency Standard & Poor's has downgraded three systemically important
Austrian banks - Raiffeisen Zentralbank Oesterreich, Erste Group and
Unicredit Bank Austria - in response to new bail-in legislation.
 
    
    VOLKSWAGEN 
    China will fine German premium auto brand Audi  around 250 million
yuan ($40.63 million) for violating anti-monopoly laws, the 21st Century
Business Herald, an influential business daily, reported on
Thursday. 
    
    GDF SUEZ 
    Colombian electricity company Celsia ES will buy stakes in
power-generating facilities in Panama and Costa Rica from France's GDF Suez for
$840 million, Celsia said in a filing with Colombia's financial regulator on
Wednesday, the first time the company has expanded abroad.
    
     SANOFI, ROCHE, GSK, ACTELION 
     U.S. biotechnology company InterMune Inc is working with financial
advisers to evaluate strategic options as it braces for potential takeover
interest from larger drugmakers, people familiar with the matter said.
    Separately, Bloomberg News reported on Wednesday that InterMune has drawn
takeover bids from Sanofi SA, Roche Holding AG,
GlaxoSmithKline Plc and Actelion Ltd. 
    
    ELECTROLUX AB 
    General Electric Co is reportedly in talks with Sweden's Electrolux
AB and Quirky Inc to sell its household appliances unit, Bloomberg reported,
citing people familiar with the matter. 
    
    DEUTSCHE BANK 
    Germany's biggest lender and shopping center operator ECE have signed a
preliminary agreement to buy the building complex "Palais Quartier" in Frankfurt
for 800 million euros ($1.07 billion) from Rabobank, Frankfurter
Allgemeine Zeitung said on Thursday, citing sources. 

 (Reporting by Francesco Canepa; Editing by Sudip Kar-Gupta)