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Europe Factors to Watch-Shares to dip on doubt about Fed's move
August 7, 2013 / 5:31 AM / 4 years ago

Europe Factors to Watch-Shares to dip on doubt about Fed's move

PARIS, Aug 7 (Reuters) - European stocks are set to dip on Wednesday,
mirroring losses on Wall Street after comments from U.S. Federal officials
raised doubts about when the central bank could start scaling back its stimulus
    At 0617 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were down 0.1-0.3
    Chicago Fed President Charles Evans, typically among the most dovish
policymakers, said the central bank will probably trim its bond buying programme
later this year and could do so as early as next month, depending on the
economic data. 
    Another Fed official, Dennis Lockhart, president of the Federal Reserve Bank
of Atlanta, told Market News International in an interview that the Fed could
begin trimming the size of the stimulus program as soon as September, although
it might wait longer if the expected economic growth in the year's second half
fails to materialize. 
    Last Friday, tepid U.S. monthly jobs data fuelled expectation the Federal
Reserve would be careful not to start cutting back its quantitative easing
programme too early, sending stocks higher.
    U.S. shares fell on Tuesday following the comments from the two Fed
officials, with the S&P 500 losing 0.6 percent, while Japan's Nikkei
 sank 4 percent on Wednesday.
    "Certainly the added risk that the September FOMC meeting will herald a
major announcement has been blamed for the pullback in equities," IG Chief
Market Strategist Chris Weston wrote in a note.
    "It seems to us that the market looks tired and a pullback would be healthy,
although on current news flow it's hard to make a case for any more than a 5
percent pullback."
    Earnings were still at the forefront of investors' minds on Wednesday, with
Dutch financial group ING posting lower-than-expected second-quarter
net profit, while French bank Natixis posted better-than-expected
    Two thirds of the way through Europe's earnings season, 56 percent of STOXX
Europe 600 companies have met or beaten analyst forecasts, with a
particularly strong batch of results coming from French blue-chips - 82 percent
have met or beaten forecasts, according to Thomson Reuters StarMine data -
sparking expectations of a French equity renaissance. 
    The mining sector will be in the spotlight on Wednesday, as Glencore Xstrata
 and JPMorgan Chase & Co face a U.S. lawsuit, along with the
London Metal Exchange, alleging they artificially inflated aluminium prices, in
the second legal challenge related to metal warehousing in a week.
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,697.37  -0.57 %    -9.77
 NIKKEI                             13,824.94     -4 %  -576.12
 MSCI ASIA EX-JP                       511.01     -1 %    -5.16
 EUR/USD                               1.3308   0.02 %   0.0003
 USD/JPY                                97.11  -0.64 %  -0.6300
 10-YR US TSY YLD                       2.631       --    -0.01
 10-YR BUND YLD                         1.689       --    -0.01
 SPOT GOLD                          $1,281.90   0.05 %    $0.61
 US CRUDE                             $105.33   0.03 %     0.03
  > GLOBAL MARKETS-Nikkei leads Asian stocks lower; dollar dips 
  > US STOCKS-Wall St finishes lower on uncertainty about Fed's move 
  > Nikkei slides as strong yen hits exporters; index heavyweights tumble 
  > FOREX-Dollar hits 6-week low vs yen on Fed uncertainty 
  > PRECIOUS-Gold drops to three-week lows on stimulus fears 
  > METALS-Copper slips on caution ahead of China data 
  > Brent near $108, slips on Iran and ahead of China/U.S. data 
    The French bank reported a 29 percent drop in quarterly net income compared
with the year-ago period, which had been flattered by one-off accounting gains
linked to a fall in the value of the bank's own debt. 
    The Dutch banking and insurance group reported a second-quarter net profit
of 788 million euros, below analysts' forecasts and down 39 percent from a year
    Glencore Xstrata and JPMorgan Chase & Co face a U.S. lawsuit, along
with the London Metal Exchange, alleging they artificially inflated aluminium
prices, in the second legal challenge related to metal warehousing in a week.
    Angela Merkel's challenger Peer Steinbrueck said he would beef up proposals
to separate retail and investment banking activities at German banks, in an
effort to shield clients' savings in the event of a bank collapse. "The current
bank separation law in Germany is insufficient," Steinbrueck told Reuters.
    The German reinsurer net profit rose by more than expected to 186.3 million
euros ($248 million) in the second quarter, allowing the group to confirm its
full-year target of earning 800 million euros in net profit. 
    The German publisher on Wednesday reported better-than-expected
second-quarter results as gains at its digital publications offset a drop at its
print titles. 
    The Austrian steelmaker beat market expectations with slight declines in
sales and profits for its first quarter and said it saw the economy stabilising.
    China fined six companies including Mead Johnson Nutrition Co,
Danone and New Zealand dairy giant Fonterra a total of $110 million
following an investigation into price fixing and anti-competitive practices by
foreign baby formula makers. 
    The nationalised Franco-Belgian financial group posted a smaller net loss in
the first half of 2013 than in the same period last year. 
    The city of Berlin is close to agreeing a deal to buy back the French water
and waste group's 24.95 percent stake in Berliner Wasserbetriebe, which provides
water to the German capital.
    The UK's advertising watchdog has ruled against Airbus over its complaint
that a Boeing advert used misleading figures to promote one of its
aircraft against a rival made by the European company. 
    Bayer AG's experimental drug to treat two types of pulmonary hypertension
should be approved at doses proposed by the company, an advisory panel to the
U.S. Food and Drug Administration ruled on Tuesday. 
    UBS AG agreed to pay $49.8 million to settle U.S. Securities and Exchange
Commission charges it misled investors about a mortgage bond transaction it
structured prior to the 2008 financial crisis, the regulator said on Tuesday.

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