STOCKS NEWS EUROPE-UBS cuts 2008 EPS forecast to zero growth
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10:20GMT 22Jan2008-UBS cuts 2008 EPS forecast to zero growth
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UBS says it cuts its top-down 2008 EPS growth forecast for European companies to zero from 5 percent with risk of negative growth, because of further deterioration in macro data from the United States and Europe.
The broker also says it has reduced its year-end index target for the FTSEurofirst 300 .FTEU3 to 1,500. The FTSEurofirst 300 is down 0.4 percent at 1,274.13.
UBS says commercial services, retailing and capital goods appear amongst the most exposed, and believes telecoms and energy will be resilient to earnings downgrades.
"Consensus estimates of 10.2 percent EPS growth in 2008 are too high, in our view. The good news is the market tends to trough two months before earnings momentum turns. The bad news is we've only had three months of downgrades; normal down cycles last for 10 months," the bank says in a research note.
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09:34GMT 22Jan2008-UK property and builder stocks rise on rate cut talk
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UK property stocks feature among the gainers on the FTSE 100 .FTSE in a choppy and falling market as traders cite market talk of interest rate cuts from central banks.
Hammerson (HMSO.L) adds 2.9 percent, Taylor Wimpey (TW.L) is up 3.5 percent, British Land (BLND.L) climbs 1 percent and Land Securities Group (LAND.L) is 1.3 percent higher. Lower borrowing costs would aid the propery market. "If they cut rates pretty aggressively, it's going to seriously help the real estate sector and that seems to be what we're seeing," says Mark Priest, a trader at TradIndex. "The property sector has been hammered with all the rate rises we had through last year."
Traders in Paris cite market talk of a rate cut of between 75 to 100 basis points from the U.S. Federal Reserve.
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