* FTSEurofirst dips 0.46 of a point
* Downside from weak NFP reading seen limited
* Hugo Boss slides after Permira sells stake
* RBS falls as revenues suffer despite profit
By Alistair Smout
LONDON, May 3 European shares held near
five-year highs on Friday as central bank stimulus continued to
support equities over other asset classes.
Key U.S. non-farm payrolls (NFPs) data for April, due at
1230 GMT, is expected to show an increase of 145,000 jobs, with
limited downside potential for equities even if the figure is
weaker, according to Manoj Ladwa, head of trading at TJM
"If the numbers do come in around expectations, it'll be
received relatively well, but if it's a lot lower, then the
Federal Reserve has already indicated it's going to continue its
bond purchasing programme," Ladwa said.
"The market is well supported at the moment from central
banks globally, and with the ECB yesterday as well cutting
rates, all these measures are very supportive of higher equity
By 1009 GMT, the FTSEurofirst 300 was down 0.46 of
a point at 1,206.07, just 0.3 percent off a five-year closing
high at 1,207.83 set in March. The index has gained 5.1 percent
since mid-April, despite a disappointing earnings season.
In the current quarter, 59 percent of companies in Europe
have missed earnings expectations while the forecasts for the
second quarter have been cut by 2.2 percent on average over the
last 30 days, according to Thomson Reuters Starmine data.
German fashion house Hugo Boss was Europe's top
faller, down 5.9 percent after private equity firm Permira
sold a further 10 percent stake in the company.
Deutsche Bank also downgraded Hugo Boss to "hold" from "buy"
after first-quarter sales missed expectations on Thursday.
"Given the very weak conditions there's no surprise that
domestically focused European companies are performing less well
than their U.S. counterparts," said Henk Potts, market
strategist at Barclays.
"Having said that, valuations in some way reflect that
already, and the market is holding up. Selectively there are
some opportunities in Europe, but we prefer the U.S. market in
general, and the earnings season has cemented that view."
One such opportunity was Germany's Adidas, up 6.3
percent after the sports brand posted its highest-ever gross
However, RBS slid 6.9 percent despite posting a
pre-tax profit of 826 million pounds after the state-backed
lender reported worse-than-expected operating results, hit by
falling revenue at its markets business.
"On the surface, those numbers don't look too bad but some
of their core businesses are not performing so great" Ladwa
said, adding that 280 pence, its session low on Friday, was an
attractive level to buy.