LONDON Jan 20 European shares were expected to open lower on
Monday, tracking losses on Wall Street and in Asia, with banking shares coming
under scrutiny after Deutsche Bank posted a surprise pre-tax loss of
1.15 billion euros.
The bank's losses for the fourth quarter were due to heavy costs for
litigation and restructuring and it warned that 2014 would be another year of
further challenges and reform.
Investors were also likely to trade cautiously after Chinese growth eased to
7.7 percent in the last quarter of 2013 from 7.8 percent the previous quarter,
and some analysts predict the world's second-largest economy will keep losing
momentum this year, all of which may keep investors cautious on a thin trading
day due to a U.S. holiday.
Markets in the United States are closed on Monday for the Martin Luther King
Day holiday after U.S. shares ended 0.3 to 0.5 percent
lower in the previous session.
The negative sentiment following disappointing results from U.S.
conglomerate General Electric continued in Asia on Monday, with MSCI's
broadest index of Asia-Pacific shares outside Japan falling 0.4
percent and Japan's Nikkei dropping 0.6 percent.
At 0724 GMT, futures for the Euro STOXX 50, Germany's DAX
and France's CAC were 0.1 to 0.3 percent lower.
The FTSEurofirst 300 index managed to gain 0.5 percent to close at
1,345.02 points on Friday, a level not seen in 5-1/2 years. Germany's DAX index
set a new record high and the STOXX Europe 600 index climbed
to a six-year high following a rally in mining stocks.
The euro zone's blue-chip Euro STOXX 50 index finished 0.1
percent higher at 3,154.10 points, with charts suggesting that the index
concluded a consolidation below 3,130 points and triggered a new buy signal last
"As a consequence the index is working on establishing a new medium-term
uptrend. The next support area is see at 3,130," Sophia Wurm, technical analyst
at Commerzbank, said.
Investors will focus on the earnings season this week when major European
and U.S. companies such as Unilever, Nokia, Johnson &
Johnson, Microsoft and Xerox are scheduled to announce
According to StarMine SmartEstimates, which focus on predictions by the
historically most accurate analysts, the STOXX Europe 600 companies are
seen missing fourth quarter consensus by 0.4 percent on revenues and by 1.5
percent on earnings.
> Asia manages muted cheer for China growth
> S&P, Nasdaq end down with Intel, GE; Dow gains
> Nikkei sags to 1-week low, Nintendo dives on loss forecast
> Prices rise, Fed meeting this month in focus
> Dollar holds firm vs euro; Aussie off lows after China GDP
> Gold hits 6-week high; platinum up on S. African strikes
> London copper steady; China GDP shows cooling growth
> Brent falls towards $106 on strong dollar; China data may support
Deutsche Bank posted a surprise pre-tax loss of 1.15 billion euros ($1.56
billion) for the fourth quarter due to heavy costs for litigation and
restructuring, and warned that 2014 would be another year of further challenges
Separately, Germany's top banking watchdog plans to intensify its probe into
possible manipulation of benchmark foreign exchange rates at Deutsche Bank by
launching a so-called special investigation, magazine Der Spiegel reported on
The world's largest brewer has agreed to buy South Korea's Oriental Brewery
Co Ltd from KKR & Co and Affinity Equity Partners for $5.8 billion
including debt, regaining ownership of a key Asian asset at a time of strong
growth in the industry across the region.
German banks are more likely to restructure than turn to the capital markets
for more cash ahead of upcoming stress tests, bankers and analysts said on
Friday, a day after the country's top regulator Bafin said some banks may face a
Separately, the European Central Bank has given selected euro zone banks
three weeks to submit extensive details of their trading books and risk models
as part of a review of the currency bloc's largest banks.
Telecom company Vodafone and broadcaster BSkyB have held high-level
discussions on how to curb BT's BT.L growing reach over the broadband market,
the Sunday Times reported, citing senior sources.
Germany's air traffic controllers are planning to strike for one hour on
Jan. 29, in a show of support for an expected Europe-wide strike that could lead
to considerable flight disruption, their union boss said on Saturday.
Softbank Corp has entered direct talks with Deutsche Telekom as it
seeks to combine its Sprint Corp unit with the German company's T-Mobile
US, Bloomberg reported on Sunday, citing people familiar with the
Germany's economy minister wants to cut promptly the support price paid for
electricity from solar and wind power generators by about a third by 2015,
according to a draft proposal for one of the most challenging economic reforms
facing Chancellor Angela Merkel's new government.
PSA PEUGEOT CITROEN
PSA Peugeot Citroen, the troubled French automaker negotiating a tie-up with
China's Dongfeng, said on Monday its global car sales fell 4.9 percent as
European demand hit a twenty-year low in 2013.
The French state-controlled nuclear group and Spanish wind turbine maker
Gamesa are in advanced talks over a joint venture in offshore wind
turbines, two sources with direct knowledge of the matter said.
Abu Dhabi's state-owned carrier Etihad Airways is joining with the French
energy firm and U.S. aircraft maker Boeing to develop biofuels in the
emirate, company officials announced on Sunday.