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UPDATE 1-U.S. worries constrain European shares, Getinge slumps
October 8, 2013 / 8:00 AM / 4 years ago

UPDATE 1-U.S. worries constrain European shares, Getinge slumps

* FTSEurofirst 300 flat, Euro STOXX 50 edges up 0.2 pct

* Getinge slumps after profit warning

* U.S. budget stalemate keeps key equity indexes in check

By Sudip Kar-Gupta

LONDON, Oct 8 (Reuters) - The United States’ budget stalemate kept European shares in check on Tuesday, with key indexes making little progress, while medical technology group Getinge slumped after a profit warning.

The pan-European FTSEurofirst 300 index was broadly flat at 1,241.64 points while the euro zone’s blue-chip Euro STOXX 50 index edged up 0.2 percent to 2,928.33 points.

Swedish company Getinge was the worst-performing stock on the FTSEurofirst 300 index, falling 7 percent after it became the latest company to warn on profits, following the likes of consumer goods group Unilever and cruise operator Carnival.

The FTSEurofirst 300 remains up 9 percent since the start of 2013 while the Euro STOXX 50 is up by 11 percent, but both have lost ground in October, falling from multi-year highs after the U.S. government had to partially shut down due to disagreement among politicians over the country’s budget.

“We’re trending downwards. I’d keep selling the rallies,” said Berkeley Futures associate director Richard Griffiths.

The profit warnings from some of those European companies have also weighed on stock markets this month, with analysts having trimmed 2013 earnings estimates for the pan-European STOXX 600 index by 3 percent since the start of the third quarter. ()


The U.S. budget standoff has led to concerns about the $16.7 trillion U.S. debt ceiling, which Treasury Secretary Jack Lew has said the government will hit no later than Oct 17.

However, most investors still expect a deal to be reached eventually, and U.S. President Barack Obama said he would accept a short-term increase in the nation’s borrowing authority to avoid a default.

“What’s going on in the U.S. is insane, but the market seems to be taking it in its stride,” said Andreas Clenow, hedge fund trader and principal of Zurich-based ACIES Asset Management.

“I‘m prepared to step out at any time should it come crashing down, but for the moment I‘m still betting on the upside. Equities have held up remarkably well given what’s going on. If that’s not a strong sign, I don’t know what is.”

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