September 12, 2011 / 5:30 AM / 7 years ago

European Factors-Shares set for steep fall on Greece worries

 (Adds detail, company news; updates snapshot table)	
 LONDON, Sept 12 (Reuters) - European shares were set to slip again on Monday, tracking a slump in overseas markets, on growing concerns that Greece might default and as France and Germany were struggling to present a united front to shore up confidence in the euro zone.	
 Futures for Euro STOXX 50 STXEc1, for Germany’s DAX FDXc1 and for France’s CAC FCEc1 were down 3.1 to 3.3 percent. Financial spreadbetters earlier predicted Britain’s FTSE 100 to open as much as 1.4 percent lower.	
 “At the risk of sounding like a broken record, once again it’s deepening concerns over Europe that are seriously eroding investor confidence and sentiment,” Ben Potter, strategist at IG Markets, said.	
 “The trigger this time was European Central Bank Executive Board Member Juergen Stark’s resignation on Friday evening and speculation doing the rounds that Greece is close to defaulting and that Germany is devising plans on how to shield German banks should this play out.”	
 Analysts said it was only a matter of time before Greece, which keeps falling behind on its fiscal targets, would have to default. 	
 A source at this weekend’s G7 finance chiefs’ meeting said the German Finance Ministry was increasingly convinced that Greece will not be able to avoid default for much longer, so ring-fencing the euro zone’s weakest debtor and limiting contagion will be crucial. 	
 The market was expecting to get some direction from the Group’s meeting, but it offered few specifics and differed in emphasis on Europe’s debt crisis. It, however, pledged to make a coordinated response to a slowdown in the global economy. 	
 Banking stocks might come under renewed pressure, with sources saying on Saturday that BNP Paribas , Societe Generale and Credit Agricole were expecting an “imminent” decision from Moody’s, which first put them under review for possible downgrade on June 15. 	
 UBS chief executive Oswald Gruebel told a newspaper on Sunday that some banks may have to get help from the state as plunging share prices could make it difficult to raise capital. .	
 And in Britain, Independent Commission on Banking said UK banks should shield retail operations from riskier investment banking units and boost capital levels to protect taxpayers from future crises, in far-reaching proposals that could cost the industry 7 billion pounds ($11 billion) a year. 	
 A sharp decline in metals and oils prices was expected to drag down mining and energy stocks. Copper fell more than 1 percent, while crude oil CLc1 was down 1.9 percent on growth concerns.	
 On charts, support for the Euro STOXX 50 , the euro zone’s blue chip index, was seen as 2,046 points — its 78.6 percent retracement of the rally between 2009 and 2011. Analysts said a fall below the level could mean a sharp decline for the index, which fell more than 4 percent to 2,073.67 on Friday.	
 The FTSEurofirst 300 of top European shares ended 2.6 percent lower on Friday. It hit a two-year low last month and is down 18 percent this year. U.S. shares finished 2.4 to 2.7 percent lower.	
 On Monday, Japan’s Nikkei average fell 2.3 percent.	
  	 
  MARKET SNAPSHOT AT 0634 GMT                                      
                                             LAST     PCT CHG    NET CHG
  S&P 500                         1,154.23     -2.67 %     -31.67
  NIKKEI                         8,535.67     -2.31 %    -201.99
  MSCI ASIA EX-JP                     -2.41 %     -12.04
  EUR/USD                           1.3541     -0.18 %    -0.0025
  USD/JPY                            77.01      -0.7 %    -0.5400
  10-YR US TSY YLD              1.911          —       0.00
  10-YR BUND YLD                1.743          —      -0.03
  SPOT GOLD                      $1,848.09     -0.49 %     -$9.07
  US CRUDE            CLc1               $85.35     -2.17 %      -1.89 	
 * GLOBAL-Asian stocks fall, dollar gains on Europe woes   
 * Wall St tumbles as ECB discord stirs broad fears        
 * Nikkei falls 2 pct to 6-mth low on European woes        
 * Stocking up on Treasuries ahead of a possible storm     
 * Euro slumps to 10-yr low vs yen as Greece worries mount 
 * Gold extends losses on dollar, jewellers shop around    
 * London copper falls 1 pct on economic concerns          
 * Oil falls $1 as dollar gains, investors shun risk       	
 	 
 COMPANY NEWS	
  	 
 SOCIETE GENERALE 	
 French bank Societe Generale said it would free up 4 billion euros of capital by 2013 by selling assets, improving its core Tier 1 ratio by 100 basis points. 	
 	 
 ASSOCIATED BRITISH FOODS 	
 Primark-owner Associated British Foods said it is on track to deliver flat annual earnings with better than expected sugar profits helping to offset lower than forecast margins at its discount fashion chain. 	 	
 LUFTHANSA  	
 Lufthansa has appointed banks, among them Morgan Stanley , to sound out a potential sale of its loss-making British unit bmi, a source close to the process told Reuters.  	
   	 
 TECHNIP   	
 The French oil services group is to buy U.S. underwater oil services specialist Global Industries Ltd. , valuing the company at around $1 billion, including debt. 	
 	 
 VOLKSWAGEN (VOWG_p.DE)  	
 Volkswagen and Suzuki Motor were locked in a fresh spat on Monday, further threatening their fragile alliance, after the German carmaker accused its Japanese ally of violating the terms of their partnership.  	
 Separately, Volkswagen plans to add eight factories within seven years to a total of 70 factories worldwide, CEO Martin Winterkorn told Automotive News Europe. One of the eight will likely be a North American plant for Audi, Winterkorn said.  	
  	 
 DEUTSCHE BOERSE DB1Gne.DE  	
 The European Commission will not impose serious anti-trust restrictions on the $9 billion merger between Deutsche Boerse and NYSE Euronext and will instead use new regulations to force the exchanges to open up, sources said.   	
 	 
 VODAFONE 	
 Verizon Communications has dashed the hopes of Vodafone investors by ruling out a return to a recurring dividend from the two companies’ U.S. mobile phone joint venture, called Verizon Wireless, the Financial Times reported.  
 	 
 YELL 	
 Yell, the UK-based, highly geared directories company, is set to ask HSBC  to form a committee to bring together its banking syndicate and renegotiate its covenants, the Financial Times reported on Monday.   	
 	 
 SABMILLER  	
 Australian brewer Foster’s Group has reiterated its opposition to a $10 billion takeover bid by SABMiller, telling its shareholders to take no action in relation to the offer.  	
  	 
 BHP BILLITON  	
 The global miner said on Monday negotiations with unionised workers at its Queensland coal mines had reached an impasse and the company will now move to have employees vote on an agreement at the end of this month.  	
  	 
 ROYAL DUTCH SHELL (RDSa.L)  	
 Iraq’s oil minister said on Sunday he saw no problem with the long-awaited $17 billion gas deal with Royal Dutch Shell after the country’s top energy committee sent the final draft agreement to the cabinet for approval.  	
   	 
 MUNICH RE (MUVGn.DE)  	
 Munich Re, the world’s biggest reinsurer, said it expects to remain in the black and stick to its dividend proposal this year even as it braces for a large number of hurricanes, board member Torsten Jeworrek told German daily Der Tagesspiegel.  	
	 
 METRO  	
 Chief Executive Eckhard Cordes has lost the support of Metro’s major shareholder Haniel, magazine Der Spiegel reported, citing sources close to the Haniel family. 	 	  (Reporting by Atul Prakash)	  

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