LONDON Dec 5 European shares were set to drop for a fourth
straight day to trade near a seven-week low on Thursday, with investors taking
some money off the table before central bank rate decisions and Friday's crucial
U.S. jobs data.
Although the Bank of England and the European Central Bank are likely to
hold off any fresh policy action later in the day, the ECB's new economic
forecasts will be in focus for signs of prolonged price weakness that could lead
it to act again next year.
The ECB surprised markets last month with a cut in rates to a new record
low. With inflation running far below its target, analysts are looking to the
new projections for clues about whether the ECB could yet take further policy
measures to support the euro zone's weak economic recovery.
"We continue to expect a more aggressive ECB stance into 2014," Credit
Agricole said in a note. "Market nervousness is likely to continue today,
although activity is likely to be limited ahead of the U.S. payrolls data
Better-than-expected reading of the ADP National Employment Report on U.S.
private-sector jobs on Wednesday has raised expectations that Friday's non-farm
jobs data will also surprise on the positive side.
A further improvement in the labour market could prompt the U.S. central
bank to trim its stimulus sooner than previously expected, a negative scenario
At 0726 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were 0.2 to 0.4 percent
The FTSEurofirst 300 index hit a seven-week low and ended 0.6
percent lower at 1,273.59 on Wednesday on concerns of a cut in stimulus after
data showed U.S services industry expanded at a decent pace last month, exports
hit a record high in October and private-sector hiring rose in November at the
fastest pace in a year.
The private sector jobs data came ahead of the government's employment count
for November on Friday. The report is expected to show a gain of 180,000 in
nonfarm payrolls after a 204,000 rise in October, according to a Reuters poll.
Some economists said the ADP data suggested the report could show a larger gain
than the consensus forecast.
Investors will keep a close eye on U.S. jobless benefits data for the week
ended Nov. 30 at 1330 GMT, with economists forecasting 325,000 new filings, up
from 316,000 in the prior week. U.S. preliminary (second) GDP forecasts for the
third quarter, also due at 1330 GMT, are likely to show an annualised growth of
3 percent, up from 2.8 percent in the first estimate.
"(The revised GDP estimate) is quite encouraging for the U.S. and could
again encourage the Fed to reduce its asset purchases in a couple of weeks and
test the water to see whether the economy can continue the recovery without its
support," Alpari analyst Craig Erlam said.
> Asian shares ship water, euro awaits ECB
> Dow, S&P 500 drop for 4th straight day; Fed a concern
> Nikkei eases as nervous investors await U.S. jobs report
> U.S. bond prices fall on upbeat economic data
> Yen firmer but still shaky; focus shifts to ECB meeting
> Gold eases after short-covering rally, tapering fears drag
> London copper comes off 9-day high as short-covering fizzles
> Brent drops towards $111 as OPEC keeps output target; U.S. data eyed
MERCK, AZ ELECTRONIC MATERIALS,
German drugs and chemicals group Merck KGaA said on Thursday it had agreed
to buy AZ Electronic Materials, a maker of specialty chemicals used to make
Apple's iPad, for about 1.57 billion pounds ($2.57 billion).
France's BNP Paribas agreed to buy the Dutch lender Rabobank's
Polish unit Bank BGZ, valuing it at 4.2 billion zlotys ($1.4 billion)
in another sign the local banking sector undergoes fast consolidation, Rabobank
Billionaire Alvaro Saieh is close to finalizing a merger deal for Chile's
CorpBanca, in which he has a controlling stake, two sources with knowledge of
the deal told Reuters, with BBVA and Brazil's Itau Unibanco Holding the
Brazil antitrust watchdog Cade ruled on Wednesday that Spain's Telefonica
must exit its direct and indirect stake in wireless carrier TIM Participações or
seek a new partner for its Vivo mobile phone unit.
The bank announced changes in its top management on Thursday, giving its
financial chief expanded powers after asset management head John Fraser retired.
FLSMIDTH & CO
The Danish engineering group cut its full-year profit forecast late on
Wednesday by over 10 percent after it lost an arbitration case against Danish
construction firm MT Hoejgaard.
Norsk Hydro, one of the world's largest producers of aluminium, expects
world demand outside China to be stable next year before picking up in the next
decade, the Norwegian firm said on Thursday.
The chatter on Wednesday was that the London-based broadband provider's days
of independence were numbered, with Vodafone mentioned among possible
suitors for the company, according to various newspaper market reports.
Japan's securities watchdog said on Thursday it had found that a Tokyo-based
unit of Deutsche Bank had violated financial regulations by lavishly
entertaining pension fund clients who are considered public employees under the
Credit Suisse said it will sell its private bank in Germany to
Frankfurt-based Bethmann Bank, part of ABN Amro,
Kering has entered into exclusive talks to sell mail order and online
retailer La Redoute to its managers in a fresh attempt to offload the
China's top economic planner has approved the launch of a joint venture
between Dongfeng Motor Group Co and Renault to build and sell cars in
China, the country's second-largest automaker said on Thursday.
Sanofi's diabetes treatment lixisenatide demonstrated similar control over
blood sugar levels whether it was administered before breakfast or the main meal
of the day, late-stage trial results showed on Thursday.
Dassault Systemes signed an agreement to acquire an 84 percent stake in
Realtime Technology AG (RTT), a provider of 3D visualization software, marketing
solutions and computer generated imagery services.