March 10, 2014 / 7:46 AM / in 4 years

European Factors to Watch-Shares seen down; focus on miners

LONDON, March 10 (Reuters) - European shares are expected to extend the previous session’s steep losses on Monday, with miners seen hit by weak Chinese economic data, which revived concerns about slowing growth in the country, the world’s biggest consumer of industrial metals.

Investors, already jittery due to tension in Ukraine, where Russian forces seized another border post and a military airfield, faced weekend data from China showing a surprisingly sharp drop in exports, which tipped the country’s trade balance into a deficit.

“The data comes on the heels of the first Chinese corporate bond default, and clearly raises questions over the health of the world’s second-largest economy,” Keith Bowman, equity analyst at Hargreaves Lansdown, said.

“The UK’s FTSE 100 index remains particularly vulnerable, given its high weighting in global mining stocks. Germany also stands at risk, with its high volume of exports to China.”

At 0723 GMT, futures for the Euro STOXX 50, Britain’s FTSE 100 , Germany’s DAX and France’s CAC were 0.2 to 0.9 percent lower.

European basic resources stocks, which fell 3.5 percent in the previous session, are expected to see a further sell-off, tracking a steep decline of 1.3 to 2.7 percent in base metals trade figures from China.

“The negative cues seem to be stacking up. China, Ukraine and a good non-farms pointing to no slow down in (stimulus) tapering are not a conducive environment for bulls,” Capital Spreads dealer Jonathan Sudaria said in a note, referring to Friday’s better-than-expected U.S. jobs data.

“Supporting markets is the mentality that equities are the only game in town, so for now the ‘buy the dips’ strategy looks to be holding.”

The FTSEurofirst 300 index of top European shares finished down 1.3 percent at 1,326.70 points on Friday. The index fell 1.6 percent last week and is up just 0.8 percent this year after climbing 16 percent in 2013.

On the macroeconomic front, investors will keep an eye on French and Italian industrial output numbers due later in the session.

Europe bourses in 2014:

Asset performance in 2014:------------------------------------------------------------------------------ > Equities slide on disappointing China trade data, Ukraine crisis > S&P 500 ends at another record after strong jobs data > Nikkei retreats from 5-week high on China data, Ukraine worries > Yields highest in six weeks after solid jobs gains > Yen in favour as weak China, Japan data sap risk appetite > Gold drops as U.S. growth optimism weighs, China sells > Shanghai copper slides 5 pct on China concerns > Brent slips towards $108 on China data; supply concerns cap fall



France’s Bouygues Telecom has agreed to sell its mobile network and much of its spectrum to smaller rival Iliad as a way to head off competition regulators’ concerns about its pending bid for Vivendi’s SFR .


German builder Hochtief AG plans to spend over $1 billion to lift its majority stake in Australia’s Leighton Holdings Ltd, seeking to push through restructuring at a business that already delivers most of Hochtief’s profit.


France’s low-cost telecom Iliad posted a strong rise in sales and profit last year as it invested to build its mobile network across France.


A committee of board directors at the French media and telecoms group met on Saturday to review rival offers for telecoms unit SFR and prepare a meeting of the supervisory council possibly at the end of the week, sources close to the matter said.


The U.S. Food and Drug Administration has asked the drugmaker and its U.S. partner Regeneron to assess potential neurocognitive side effects of their experimental cholesterol drug, Sanofi said in its annual report.


The consumer goods company said it had bought a majority stake in water purification company Qinyuan, its biggest Chinese acquisition in ten years, without disclosing what it paid.


The drugmaker said on Monday it had paid 64 billion rupees ($1.05 billion) to increase its stake in its Indian pharmaceuticals unit to 75 percent, as it banks on rising demand for medicines in emerging markets.


The world’s fourth-largest scents and flavours company, saw core earnings grow 10 percent in 2013 as an expansion of its menthol production was absorbed by the market and amid strong business in North and Latin America.nASM0005XJ


Italy’s biggest utility Enel and oil services company Saipem will sign an agreement in coming months to plan and build thermal power plants round the world, two sources familiar with the matter said on Sunday.


The French bank’s global head of foreign exchange Vincent Leclercq is no longer working at the bank, two sources familiar with the matter told Reuters on Friday.

Separately, U.S. authorities are investigating whether Credit Agricole and Societe Generale violated anti-money laundering rules and economic embargoes on countries like Iran, according to a person familiar with the investigation.


Deutsche Bank denied a report in the Frankfurter Allgemeine Zeitung on Friday that claimed a senior bank official knew of alleged currency market manipulation efforts as far back as 2006.


Britain’s fourth-biggest grocer, WM Morrison, is expected to report its lowest annual profit in five years on Thursday and could also detail plans to sell about 10 percent of its freehold property and return surplus cash to shareholders.


British engineering company Rolls-Royce said on Friday it would buy the German carmaker’s 50 percent stake of a jointly owned power systems company.

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Sweden’s Economic Crime Authority is investigating eight suspected cases of insider trading in Scania shares in connection with majority owner Volkswagen’s offer to buy out other shareholders in the Swedish truck maker.

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Top Airbus executives said they still hoped to expand the company’s share of the shrinking U.S. defense market but did not see a large U.S. acquisition target in the near-term.


The chief executive of Areva said the nuclear group had made an “important step” in negotiations with the Niger government on new contracts to mine uranium.


Loss-making France-Corsica ferry operator SNCM, which is partly owned by French water and waste group Veolia Environnement, plans to order four new ships, an SNCM spokesman said on Friday.

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