LONDON, May 16 European stocks are seen opening flat to lower on
Thursday after setting five-year highs in the previous session, with
disappointing earnings muting a recent rally that has been fuelled by monetary
At 0631 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were all flat to 0.1
The focus will be on euro zone and U.S. inflation data as well as the Philly
Fed business index, with European shares having shrugged off weak GDP data in
the previous session.
"Despite the stark evidence that all is not well, confidence in the ability
of central banks to steer their respective economies back to health remains
high," Jonathan Sudaria, sales trader at London Capital Group, said in a trading
"Whilst the bulls appear to be a little more cautious this morning and the
bears still nonexistent, it's almost certain that a batch of weak economic data
is around the corner to bolster the belief that central banks will be on hand to
help push markets up."
The euro zone blue-chip STOXX 50 has gained ten percent since
the middle of April, when expectations of a rate cut from the European Central
Bank to a record low were first formed. The cut was delivered on May 2.
The pan-European FTSEurofirst 300 index closed up 0.7 percent at
1,245.66 points on Wednesday, its highest level since mid-2008.
The index received a boost from outperforming Swiss stocks, which could be
weaker on Thursday after Zurich Insurance missed profit expectations,
although Swiss luxury goods company Richemont said sales growth in
April accelerated to 12 percent from 9 percent in the full year ended March.
The earnings season in Europe has been disappointing. With 89 percent of
STOXX 600 companies having reported, 53 percent have missed
expectations, compared to just 28 percent across the Atlantic on the S&P 500
Once the earning season has finished, European shares could see gains in
excess of the impressive returns that they've managed recently, Nick Xanders,
who heads up European equity strategy at BTIG, said.
MARKET SNAPSHOT AT 0630 GMT:
LAST PCT CHG NET
S&P 500 1,658.78 0.51 % 8.44
NIKKEI 15,037.24 -0.39 % -58.79
MSCI ASIA EX-JP 559.71 0.14 % 0.80
EUR/USD 1.2861 -0.19 % -0.002
USD/JPY 102.39 0.16 % 0.1600
10-YR US TSY YLD 1.924 -- -0.02
10-YR BUND YLD 1.362 -- -0.02
SPOT GOLD $1,393.00 0.05 % $0.71
US CRUDE $93.72 -0.62 % -0.58
> Upbeat Japan GDP brings some cheer, but Nikkei misses out
> Dow, S&P 500 end at record highs again, Google jumps
> Nikkei dragged by weak capital spending data, Olympus soars
> Tresury prices rise on weak manufacturing, inflation data
> Dollar weakens after soft factory data, retreats from high vs yen
> Gold climbs on weaker dollar, set to snap 5-day losing streak
> LME copper up, comes off 2-week low; demand worries hurt
> Oil gains $1 on U.S. equity rally
ZURICH INSURANCE GROUP
Zurich Insurance Group missed expectations on Thursday with a 7
percent fall in first-quarter net profit and said it remained on track to meet
Europe's third-biggest insurer by market capitalisation posted a net profit
of $1.062 billion for the first three months of the year, missing analysts
average forecast in a Reuters poll for $1.137 billion.
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The chief executive of the bank's Russian unit, Vladimir Golubkov, and
another executive at Rosbank were charged on Thursday for taking bribes, the
Interior Ministry was quoted as saying.
France's No. 1 bank told shareholders it expects a "significant" drop in
staffing levels in its home market as it moves to offset the shrinking economy.
Vodafone said it agreed a deal with Germany's Deutsche Telekom
that will allow the British company to offer its German customers TV over
The online shopping sites Newegg and Overstock Inc won a patent
battle on Wednesday with the French telecom equipment maker Alcatel-Lucent,
which had accused the companies of infringing its patented technology.
Swiss drugmaker Roche Holding AG is exploring a sale of its blood glucose
meters business, three people familiar with the matter told Reuters on
Wednesday, as the industry grapples with increased competition and reimbursement
Chilean copper miner Antofagasta posted a 29 percent drop in first-quarter
core profit on Thursday, as lower prices for its red metal and slightly higher
operating costs offset increased production.
India-focused miner Vedanta posted a 21 percent rise in core profit, boosted
by oil and gas assets that offset the impact of operational trouble elsewhere.
BANCA POPOLARE DI MILANO
Moody's has downgraded Banca Popolare di Milano to Ba3 from Baa3; on review
for further downgrade.
Generali CEO told Il Sole 24 Ore said he was in favour of any project that
creates value in Telecom Italia.
MONTE DEI PASCHI
The banking foundation that controls Monte dei Paschi said on Wednesday it
approved its revised bylaws. The new rules will be sent to the treausury for
ROYAL BANK OF SCOTLAND
British Prime Minister David Cameron is "open to all ideas" for returning
Royal Bank of Scotland to private ownership but its finances must improve first,
he told reporters on the last day of a three-day visit to the United States.
Offshore engineering group Subsea 7 reported first-quarter earnings in line
with expectations and warned that it was facing a series of challenges from
delayed project awards to lower pricing.
Oslo-listed Subsea 7 said its first-quarter earnings before interest, taxes,
depreciation and amortisation rose 7 percent to $241 million, in line with
expectations for $241 million.
Deliveries of the six main white goods categories in the United States (AHAM
6) rose 9.2 percent year-on-year in April, figures from the Association of Home
Appliances Manufacturers showed late on Wednesday. Shipments are up in 6.5
percent over the first four months of the year.
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