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European Factors to Watch - Shares seen lower on mixed earnings
November 1, 2012 / 6:45 AM / 5 years ago

European Factors to Watch - Shares seen lower on mixed earnings

LONDON, Nov 1 (Reuters) - European stocks are expected to open a touch lower
on Thursday, in what is expected to be a light session due to national holidays
in part of mainland Europe, with mixed results from UK heavyweights capping
sentiment.      
    At 0736 GMT, futures for the Euro STOXX 50 were down 0.4 percent,
contracts on Germany's DAX were down 0.1 percent and futures on France's
CAC were down 0.2 percent. Financial spreadbetters expected Britain's
FTSE 100 to open 3 to 10 points higher.
    While all major European markets were open, trading volume was expected to
be thin, due to public holidays in France, Italy, Spain and parts of Germany for
All Saints day.
    World No. 2 oil company Royal Dutch Shell suffered a 15 percent
fall in current cost of supply profits in the third quarter, while Lloyds
Banking Group took another 1 billion pound ($1.6 billion) hit to
compensate UK customers to whom it mis-sold loan insurance, dragging it to third
quarter loss.
    Commodities trader Glencore said its closely watched marketing
operations performed "strongly" in the third quarter, boosted by trading in
agriculture and metals, though it warned tough global economic conditions would
not improve any time soon.
    "We've had a fairly mixed bag of results and then there are still the
underlying concerns about the euro zone and China," Richard Hunter, head of
equities at Hargreaves Lansdown Stockbrokers, said.    
    Asian shares fell on Thursday but losses were curbed as the region's factory
activity surveys mostly improved, with China's official and private sector
manufacturing PMIs confirming a recovery in the growth trend even if it lacked
punch.
    Official and private sector factory surveys showed China's economy is
finally regaining some traction, but they still pointed to a sluggish recovery
with the HSBC survey recording its 12th straight month of slowing growth.
 
    "Despite some pundits championing the barely visible increase as a sign that
the world's number two economy is averting a hard landing or even a landing of
any kind, traders are a little more sceptical," Jonathan Sudaria, a night dealer
at Capital Spreads, said in a note.
    "With China's major export market Europe hitting another unemployment rate
all-time high only yesterday, it's difficult to see any sustained pick up in the
Chinese data."
    Euro zone unemployment rose to new record highs of 11.6 percent in
September, data from the European statistics office Eurostat showed on
Wednesday.
    The euro zone blue-chip Euro STOXX 50, down 12.35 points or 0.5
percent to 2,503.64 points on Wednesday, recorded a 2 percent gain in October,
but was still around 3.5 percent off a 6-month high hit in mid-September.
    Capping investors' appetite for equities was a gloomy outlook for the
European economy and mixed earnings from European companies.
    With half of the European earnings season now behind us, 44 percent of the
companies that have reported so far have missed consensus estimates.
    
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    MARKET SNAPSHOT AT 735 GMT                                      
                                    LAST  PCT CHG     NET           
                                                      CHG  
    S&P 500                       1,412.   0.02 %    0.22           
                                       6                   
    NIKKEI                        8,946.   0.21 %   18.58           
                                       7                   
    MSCI ASIA                             -0.09 %   -0.46           
    EX-JP                                                  
    EUR/USD                       1.2928  -0.23 %  -0.003           
    USD/JPY                        79.97   0.26 %  0.2100           
    10-YR US                       1.702       --    0.01           
    TSY YLD                                                
    10-YR BUND                     1.459       --   -0.02           
    YLD                                                    
    SPOT GOLD                     $1,719  -0.01 %  -$0.24           
                                      81                   
    US CRUDE                      $86.35   0.13 %    0.11           
                                                                    
                                                                    
                                                                    
 
  
  > GLOBAL MARKETS-Asian shares fall, China bucks trend            
  > Wall St ends flat, tech shares dip after Sandy shutdown        
  > Nikkei ticks up after China PMI data, Panasonic plunges        
  > TREASURIES-Prices climb on month-end trades after megastorm    
  > Yen crawls toward 4-month low vs dollar, euro steady           
  > PRECIOUS-Gold flat as investors await US data, election        
  > LME copper inches up on China data, set to climb for 3rd day   
  > Brent edges down on US fuel demand concerns after Sandy        
    
    COMPANY NEWS
    
    ROYAL DUTCH SHELL 
    The world's No. 2 oil company suffered a 15 percent fall in current cost of
supply profits in the third quarter as the impact of lower crude prices and
charges outweighed stronger margins in refining.
    
    GLENCORE 
    The commodities trader said its closely watched marketing operations
performed "strongly" in the third quarter, boosted by trading in agriculture and
metals, though it warned tough global economic conditions would not improve any
time soon. 
    
    LLOYDS BANKING GROUP 
    The bank took another 1 billion pound ($1.6 billion) hit to compensate UK
customers mis-sold loan insurance, taking its charge for the scandal to 5.3
billion pounds and dragging it to third quarter loss. 
    
    LEGAL & GENERAL 
    The British insurer said its quarterly sales rose by nearly a third, helped
by strong demand for protection policies as more companies and individuals seek
cover against financial risk. 
    
    BT 
    The telecoms group cut its revenue outlook on Thursday after European
corporate customers slashed spending and changes in regulation, resulting in a
consecutive miss on sales in the second quarter.
    
    SWISSCOM 
    Swisscom will charge 50 million Swiss francs against its fourth-quarter
earnings in connection with 100 job cuts next year, the telecommunications firm
said on Wednesday. 

    PROSIEBENSAT.1 
    ProSiebenSat.1 has attracted three offers worth more than 1.3 billion euros
($1.7 billion) for its Nordic TV channels, two people familiar with the matter
said on Wednesday, which may help to reduce the group's debt. 
    
    FRAPORT 
    The airport operator hopes to sell its 10 percent stake in Delhi airport by
the second or third quarter of next year, Kai Zobel, Fraport's vice-president
for global investments, told the Economic Times of India. Fraport would be
interested in a stake in Navi Mumbai airport, he was also quoted as saying.
       
    SALZGITTER 
    Executive-board member Johannes Nonn is leaving the company to become chief
of Salzgitter competitor Schmolz + Bickenbach, German paper Financial
Times Deutschland reported, without saying where it obtained the information.

    TELENOR 
    The Norwegian telecoms operator has opened the door to a potential sale of
its $6.4 billion stake in Vimpelcom, the world's sixth-largest telecom
group by subscribers, the Financial Times reported.
    Chief Executive Jon Baksaas told the newspaper it would be "realistic" and
"pragmatic" over any offer from Russia's Altimo group, Vimpelcom's biggest
owner.

    RENAULT 
    The French automaker said it plans to open negotiations with unions next
week as it presses for a nationwide deal on pay and conditions to improve
productivity. 
    
    SANOFI 
    Medical journal The Lancet warned that the French drugmaker's experimental
multiple sclerosis drug Lemtrada may be too costly for patients and health
insurers once it gets approved by regulators. 
    
    CARREFOUR 
    The French retailer said on Wednesday that it has finalised the sale of its
operations in Malaysia for an enterprise value of 250 million euros ($323.95
million)to Japanese retailer Aeon.

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