May 7, 2014 / 6:55 AM / 4 years ago

UPDATE 1-European Factors to Watch-Ukraine crisis sets up shares for lower start

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LONDON, May 7 (Reuters) - European stocks were seen falling at the open on Wednesday, hit by the mounting threat of a civil war in Ukraine and weak results from blue chip companies such as industrial conglomerate Siemens and brewer Anheuser-Busch InBev.

At 0649 GMT, futures for the Euro STOXX 50, Britain’s FTSE 100 , Germany’s DAX and France’s CAC were down between 0.2 percent and 0.5 percent.

Ukraine slid further towards war as violence between supporters of Russia and of a united Ukraine flared at dusk in the eastern port of Mariupol, with both sides accusing each other of tearing the country apart.

“European investors look set to take more money off the the state of affairs in the Ukraine begins to deteriorate more rapidly,” William Nicholls, a dealer at Capital Spreads, wrote in a trading note. “The country looks increasingly like it is heading for civil war - thus the change in outlook among investors is understandable.”

In a sign of the direct impact of the Ukraine crisis on European companies, France’s No. 2 listed bank Societe Generale said on Wednesday it had booked a 525 million euro ($731 million) writedown on the value of its Russian unit Rosbank blaming heightened uncertainty and a decline in the Russian rouble.

Danish brewer Carlsberg, one of Europe’s blue-chips with the highest exposure to Russia also cited currency in Russia as it reported a fall in first-quarter operating profit and lowered its full-year net profit guidance.

“Overall these warnings had to be expected and there will likely to be more of them, also it will be important to see if other sectors will start warning too especially car manufacturers for whom Russia is a very important market,” Markus Huber, a senior sales trader at Peregrine & Black, said.

Engineering giant Siemens and world’s largest brewer AB Inbev posted weaker-than-expected increases in profits on Wednesday.

With just over half of the reporting season now behind us, roughly 47 percent of STOXX Europe 600 companies which reported through May 6 have missed analyst forecasts, the worst performance since the first quarter of 2013, StarMine data showed.

Mergers and acquisitions were also in focus as Britain’s Rolls-Royce Plc agreed to sell its energy gas turbine and compressor business to Siemens for 785 million pounds ($1.33 billion).

Further denting sentiment on global equities, U.S. stocks suffered a broad selloff, with AIG pulling the financial sector lower after disappointing earnings and Twitter led a selloff in the technology and internet space with a 17.8 percent drop.

Europe bourses in 2014: (

Asset performance in 2014: ( ------------------------------------------------------------------------------ > Asian shares fall, yen rises as Ukraine conflict mounts > US STOCKS-Wall St falls in broad selloff; Twitter tumbles > Nikkei drops to 3-week low, hit by strong yen and Ukraine concerns > TREASURIES-Long bond price rises as traders await Yellen > FOREX-Kiwi recoils on NZ central bank warning, dollar nurses losses > Gold climbs towards 3-week high on softer dollar, Ukraine tensions > Nickel prices near 15-mth high on supply concerns > Brent holds above $107 on fall in U.S. crude stocks, Ukraine risks


The British grocer posted a 5.3 percent rise in annual profit, its slowest growth in nearly a decade, illustrating the pressure the industry is under to cut prices and stem the rise of the discounters.


Europe’s biggest defence contractor said its outlook for the year was unchanged from February, when it forecast an earnings drop of up to 10 percent this year.


The world’s biggest credit data company reported an 8 percent increase in annual earnings, benefiting from acquisitions and improved margins.


The budget airline said April traffic rose 10.2 percent to 5.79 million.

IMPERIAL TOBACCO GROUP : Imperial Tobacco Group posted sharp declines in reported revenue and profit, due to planned inventory reductions in a number of markets.


Indicated 0.4 percent lower

Commerzbank swept out assets from its internal “bad bank” at a faster pace in the first quarter, weighing on revenue but still allowing the bank to post a leap in net profit.

Separately, the bank has attracted five final bids for a multi-billion-euro portfolio of Spanish property loans, being sold as it takes advantage of a recovery in the country’s real estate market to help clean up its finances, sources said.

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Indicated 1.1 percent higher

The cement maker posted a more than five-fold increase in quarterly operating income that beat consensus thanks to mild winter weather in Europe and price increases in key markets.

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Indicated 1.6 percent higher

The consumer goods group on Wednesday posted better than expected first quarter core profit, helped by strong demand for washing powders and industrial adhesives in emerging markets.

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Indicated 0.4 percent lower

The engineering giant unveiled a long-awaited strategic overhaul in a bid to catch up with more profitable rivals, as it posted weaker-than-expected quarterly earnings on Wednesday, hit by charges in its energy business.

It also also struck a deal to buy Rolls-Royce’s aero-derivative gas turbine and compressor business for roughly 950 million euros and agreed to a joint venture with with Japan’s Mitsubishi Heavy.

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The world’s largest beer maker reported lower-than-expected core profit in the first quarter as increased marketing expenses ahead of the soccer World Cup limited margin expansion.


France’s third-biggest listed bank reported a 29.6 percent rise in quarterly net income as cost cuts took effect and as the health of its Italian consumer-loan unit improved.


The Dutch financial group made underlying profits of 988 million euros in the first quarter of the year, slightly missing expectations, as loan losses remained high despite a better outlook for the Dutch economy.


The ailing French industrial engineering group facing a politically charged takeover battle for its power business scrapped its dividend as it said it burned cash and saw orders fall 10 percent in its full year.


The French state-controlled utility said first-quarter sales fell 3.9 percent to 21.2 billion euros due to mild weather, which affected sales of electricity in France and gas sales abroad.


The world’s largest maker of electrical switches and sockets confirmed its full-year organic sales growth and operating margin targets as it posted a slight rise in first-quarter profit.


The French water and waste group said its first-quarter revenue fell 1.2 percent to 5.7 billion euros as its energy services unit, Dalkia, suffered from the mild winter.


The Belgian supermarket operator posted a first-quarter core profit slightly below expectations as better-than-expected sales growth in the United States was outdone by a slowdown in its Belgian operations.


The automaker ended the first quarter of the year with a net loss, hit by one-off charges linked to a deal to fully acquire its U.S. operations and by currency fluctuations, the company said on Tuesday.


Indicated 0.5 percent lower

BMW said on Tuesday legal barriers prevented the German luxury auto maker from raising its stake in a Chinese joint venture company, even as rival Daimler appeared to have found a loophole to soften strict ownership rules.

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Swiss Re, the world’s second largest reinsurer, recorded a profit of $1.2 billion for the first three months of the year, helped by fewer natural catastrophes.


France’s second-largest listed bank, said it had booked a 525 million euro writedown on the value of its Russian unit Rosbank after months of political crisis in Ukraine.


France’s third-biggest listed bank reported a 29.6 percent rise in quarterly net income as cost cuts took effect and as the health of its Italian consumer-loan unit improved.


Switzerland’s two biggest banks, UBS and Credit Suisse, must reach a minimum capital requirement of 19.2 percent and 16.7 percent of risk-weighted assets respectively in 2019, Swiss financial regulator FINMA said.

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Swisscom posted a fall in first-quarter net profit to 373 million Swiss francs, from 390 million the previous year.


The Spanish oil company has sold an 11.86 percent stake in Argentine energy group YPF to Morgan Stanley, a company spokesman said on Wednesday, without disclosing a price.

The sale was made at $26.90 per share, a source with knowledge of the matter said, or a total of $1.25 billion.

Newspaper Expansion said the company was also preparing the imminent sale of Argentine bonds it is set to receive tomorrow in compensation for the 2012 seizure of YPF.

Separately, two members of the board of Mexico’s national oil company Pemex said on Tuesday the company has yet to make a decision about whether or not to sell its 9.3 percent stake in Spain’s Repsol.


Spain’s Telefonica said on Tuesday it had made a 725-million-euro ($1 billion) binding bid for a controlling stake in the pay-TV business of Prisa , the indebted local media group that publishes El Pais newspaper.


The French retailer hired Morgan Stanley & Co and JPMorgan Chase & Co to list its global e-commerce platform spanning from Brazil to Thailand, a person familiar with the matter said, as the group confronts competition from U.S. giant Amazon Inc and Chinese rival Alibaba.


The advertising agency posted a 3 percent rise in first-quarter organic revenue, helped by a rebound in the United States where it returned to growth with client wins such as satellite TV company Dish and insurer Liberty Mutual.


The French bank reported a 3 percent rise in underlying net income for the first quarter and said it was on track to meet its 2014-2017 dividend payout targets.

Reporting By Francesco Canepa

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