LONDON, Oct 29 (Reuters) - European equity futures edged lower on Tuesday, with weak results from some of the region’s top companies set to weigh on stock markets after a strong October rally which led key indexes to hit fresh highs.
Traders added that many investors would also avoid taking on big new equity positions ahead of a U.S. Federal Reserve meeting which begins on Tuesday. The Fed is not expected to make any shift in monetary policy this week as it waits for more evidence of how badly Washington’s budget battle hurt the U.S. economy.
The euro zone’s Euro STOXX 50 futures index fell 0.2 percent by 0720 GMT. Germany’s DAX futures contract edged down by 0.1 percent while France’s CAC futures contract also fell 0.1 percent.
Third quarter earnings from Europe’s top companies have been mixed so far, with 53 percent of companies on the pan-European STOXX 600 index having beaten or met market forecasts with their results while 47 percent have missed market forecasts.
That pattern continued on Tuesday, with German industrial gases maker Linde curbing its 2013 profit outlook while French tyre company Michelin also cut its full-year operating profit target.
Deutsche Bank posted a 98 percent drop in quarterly pre-tax profit.
“Across the board, results have been a mixed bag. It doesn’t look too great,” said Terry Torrison, managing director at Monaco-based McLaren Securities.
The pan-European FTSEurofirst 300 index edged down by 0.1 percent to 1,282.93 points on Monday, with the index just 0.7 percent away from a 5-year high of 1,291.93 points set last week.
Traders expected equity markets to stay trapped in a tight range until the end of the Fed’s meeting at 2 p.m. (1800 GMT) on Wednesday, when the Fed’s policy-setting committee is to release a statement on its policy decision.
Overnight, the U.S. S&P 500 index hit a fresh record high although Apple Inc reported that profits and margins slid despite selling 33.8 million iPhones in its September quarter. ------------------------------------------------------------------------------- > GLOBAL MARKETS-Asian shares drop, dollar drifts ahead of Fed > US STOCKS-S&P 500 ends at record high on Fed hopes > Nikkei falls as hedge funds take profits; Komatsu tumbles > TREASURIES-U.S. bond prices slip after 2-year note sale > FOREX -Dollar off lows as Fed meeting looms; Aussie slips > PRECIOUS-Gold climbs to near 5-week high on Fed stimulus hopes > METALS-London copper slips on signs U.S. recovery losing momentum > Brent edges down, holding above $109/bbl on Libya
Swiss bank UBS said on Tuesday it would defer a key earnings target by at least a year because of temporary demands to hold extra capital, dampening better-than-expected third quarter results that saw the bank swing to profit.
Deutsche Bank posted a 98 percent drop in quarterly pre-tax profit to 18 million euros ($24.81 million), below the lowest expectations, weighed by a fall in trading income and a 1.2 billion euros increase in litigation provisions.
The part-nationalised British bank reported an 83 percent rise in underlying profit for the third-quarter, benefiting from an improved margin, reduced costs, and fewer customers being unable to repay loans.
Asia-focused bank Standard Chartered Plc said its operating profit grew at a low single-digit rate so far this year, with the third quarter hammered by the poor performance of its South Korea business and falling emerging-market currencies.
Italian bank UniCredit said on Monday it had completed the sale of its 6.7 percent stake in insurer Fondiaria-SAI to raise 106.3 million euros.
German industrial gases maker Linde curbed its 2013 profit outlook after it was hit by unfavourable currency swings, among others by the Australian dollar, in the third quarter.
French tyre maker Michelin said an emerging-market currency slide will hit earnings this year, cutting its full-year operating profit goal by 100 million euros ($138 million) after a drop in third-quarter revenue.
Engineering group Alfa Laval said it expected demand to be flat in the final three months of the year after posting third-quarter core earnings in line with expectations on Tuesday.
French power group EDF and water and waste company Veolia Environnement are close to a deal to split the domestic and international assets of their Dalkia energy services venture, they said on Monday.