April 18, 2013 / 5:30 AM / in 5 years

European Factors to Watch-Shares to rebound, but stay vulnerable

LONDON, April 18 (Reuters) - European shares were expected to bounce back on
Thursday, with a sharp sell-off of nearly 4 percent in the previous four
sessions prompting some investors to hunt for value, although sentiment remained
    Futures for the Euro STOXX 50, UK's FTSE 100, Germany's DAX
 and France's CAC were 0.2 to 0.5 percent higher, a day after the
FTSEurofirst 300 fell 1.6 percent to a 3-1/2-month low on fresh
concerns over the health of the global economy and a rout in commodities.
    "After a number of consecutive down days, some investors could be looking
for bargain hunting," Keith Bowman, equity analyst at Hargreaves Lansdown, said.
    "We have seen some disappointing company results and broader economic
numbers are adding an element of caution in investors' mind. Apple's decline is
another factor, which could have an impact on technology stocks."
    Apple slid more than 5 percent on Wednesday after  falling below
$400 for the first time since December 2011. A key supplier, chipmaker Cirrus
Logic, gave a disappointing revenue forecast, fuelling worries about
weakening demand for the iPhone and iPad. 
    Analysts said the stock market remained vulnerable to further declines as
major commodities such as gold, copper and oil fell further, while some
companies disappointed on the earnings front and in their sales update.
    The Finnish ship and power plant engine maker Wartsila reported
an unexpected fall in first-quarter operating profit due to weaker sales, while
underlying sales growth at the world's top food group Nestle slowed to
4.3 percent in the first quarter. ID:nWEB0033N] 
    In the United States, EBay on Wednesday gave a disappointing
earnings forecast for the second quarter, while Bank of America posted
revenue and profits that were below Wall Street expectations. 
    "A bit of short covering and bargain hunting is set to bring out the buyers
tentatively on the open, but as yesterday's sudden sell-off showed, it doesn't
take much to bring out the bears in this current environment," Jonathan Sudaria,
a dealer at Capital Spreads, said in a note.
    Resource-related equities could come under further pressure after copper
prices fell as much as 4 percent on Thursday on persistent concerns
about global growth. Aluminium dropped 1.1 percent and gold fell
more than 1 percent. 
    The STOXX Europe 600 basic resources index fell 2.4 percent in the
previous session, taking this year's losses to more than 20 percent. European
energy shares, which fell 1.9 percent on Wednesday, are down nearly 6
percent in 2013.
    On the macroeconomic front, focus will be on British retail sales data for
March at 0830 GMT, U.S. weekly jobless claims numbers at 1230 GMT and
Philadelphia Federal Reserve Bank's April business activity survey results at
1400 GMT.
     MARKET SNAPSHOT AT 0645 GMT                                    
                                                   LAST    PCT CHG   NET CHG
     S&P 500                                   1,552.01    -1.43 %    -22.56
     NIKKEI                                   13,220.07    -1.22 %   -162.82
     MSCI ASIA EX-JP                             529.34    -0.42 %     -2.24
     EUR/USD                                     1.3049     0.16 %    0.0021
     USD/JPY                                      97.90    -0.19 %   -0.1900
     10-YR US TSY YLD                             1.692         --     -0.01
     10-YR BUND YLD                               1.236         --      0.01
     SPOT GOLD                                $1,377.55     0.08 %     $1.05
     US CRUDE                                    $86.61    -0.08 %     -0.07
    * Risk assets slip on growth worries, gold tumbles           
    * Nikkei retreats as blue-chips lose ground                  
    * Drop in Apple shares, weak profits drag Wall St lower      
    * Yen slips vs dollar, eyes on risk sentiment                
    * Brent holds near $98, off 9-mth low                        
    * Gold falls 1 pct as investors cut exposure                 
    * Copper tumbles below $7,000, sparks metals sell-off        
    * Treasuries-Prices rise as stock slump spurs safety bid     

    Underlying sales growth at the world's largest food group Nestle slowed to
4.3 percent in the first quarter, missing forecasts, as demand in emerging
markets slowed further and cold spring weather hit bottled water and ice-cream
sales. For more, click on: 
    The world's largest maker of crop chemicals said a strong fungicide sales in
Latin America helped it shrug off the cold winter in the northern hemisphere to
post solid first-quarter sales. For more, click on: 
    The Finnish ship and power plant engine maker reported an unexpected fall in
first-quarter operating profit due to weaker sales, particularly in power
    Europe's biggest insurer is in talks to buy the naming rights to a soccer
stadium under construction in Brazil's largest city Sao Paulo, in what may
become the first major soccer sponsorship deal in the country hosting the World
Cup next year. 
    Commerzbank, Germany's second-biggest lender, is in exclusive talks to sell
its UK property business Eurohypo to private equity firm Lone Star and U.S. bank
Wells Fargo & Co, the Financial Times reported, citing people familiar with the
    Spanish telecoms company Telefonica launched dollar-denominated debt worth
$2 billion on Wednesday, including $1.25 billion in a 5-year bond and $750
million in a 10-year bond, Thomson Reuters news and markets analysis service IFR
Markets reported. 
    The Nordic and emerging market telecoms operator Tele2 said it was on track
to meet full-year guidance after posting first-quarter earnings marginally ahead
of market expectations on Thursday in what was its first report since selling
its Russia unit in a $3.5 billion deal. For more on the company, double click
    The Swedish telecom gear maker and operator Cellular One said late on
Wednesday that Ericsson won an order to upgrade Cellular One's network to 3G and
expand its existing number of base stations by 50 percent. For a full statement,
double click 
    Mexican miner Fresnillo, the world's largest primary silver producer, said
it would review all spending and exploration plans in the light of steep drops
in gold and silver price. 
    DEBENHAMS  Britain's second biggest department store group forecast
a better second half of the year after posting an expected 5.4 percent fall in
first-half profit that was blamed on January snow.
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